Economics 101...

I just received this and I just had to post it...Enjoy...

This is a basic Economics lesson for all, and well worth the read.

Sometimes Politicians exclaim, "It's a tax cut just for the rich!", and it
is just accepted to be fact. But what does that really mean? Just in case
you are not completely clear on this issue, which is difficult for most of
us to understand especially the way it's usually explained to us, we hope
the following will help.

Please share this with your friends as you see fit.

Tax Cuts - A Simple Lesson In Economics

This is how the cookie crumbles. Please do yourself the favor of reading
it
carefully.

Let's put tax cuts in terms everyone can understand. Suppose that every
day, ten men go out for dinner. The bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something
like
this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh $7.
The eighth $12.
The ninth $18.
The tenth man (the richest) would pay $59.

So that's what they decided to do.

The ten men ate dinner in the same restaurant every day and seemed quite
happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the
cost of your daily meal by $20."

So now dinner for the ten only cost $80. The group still wanted to pay
their bill the way we pay our taxes.

So the first four men were unaffected. They would still eat for free. But
what about the other six, the paying customers? How could they divvy up the
$20 windfall so that everyone would get his "fair share"?

The six men realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the sixth
man
would each end up being 'PAID' to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce each
man's bill by roughly the same amount, and he proceeded to work out the
amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now paid $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued
to
eat for free. But once outside the restaurant, the men began to compare
their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed
to
the tenth man "But he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar,
too.
It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when
I
got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!" The nine men surrounded
the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine sat
down and ate without him. But when it came time to pay the bill, they
discovered something important. They didn't have enough money between all
of them for even HALF of the bill!

And that, boys and girls, journalists and college professors, is how our
tax
system works. The people who pay the highest taxes get the most benefit
from a tax reduction. Tax them too much, attack them for being wealthy,
and
they just may not show up at the table anymore. There are lots of good
restaurants in Europe and the Caribbean.

David R. Kamerschen, Ph.D
Distinguished Professor of Economics
536 Brooks Hall
University of Georgia

 

C'mon Liberals...This explanation, is as basic as it can get...I posted this with the intent to educate, but I'm afraid that those to whom this explanation was intended will still not understand, and therefore we will still be exploited by the liberals.