Tweet
Pondering Taxes -
I was having lunch at PJ's with one of my favourite clients
last week and the conversation turned to the government's
recent round of tax cuts. "I'm opposed to those tax cuts,"
the retired college instructor declared, "because they
benefit the rich. The rich get much more money back
than ordinary taxpayers like you and I and that's not fair."
"But the rich pay more in the first place," I argued, "so it
stands to reason that they'd get more money back."
I could tell that my friend was unimpressed by this meager
argument. Even college instructors are a prisoner of the
myth that the "rich" somehow get a free ride in Canada.
Nothing could be further from the truth.
Let's put tax cuts in terms everyone can understand.
Suppose that everyday 10 men go to PJ's for dinner.
The bill for all ten comes to $100. If it was paid the way
we pay our taxes, the first four men 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.
The 10 men ate dinner in the restaurant every day and
seemed quite happy with the arrangement until 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. Now dinner for the table only costs $80."
The first four are unaffected. They still eat for free.
Can you figure out how to divvy up the $20 savings
among the remaining six so that everyone gets his fair
share?
The men realize that $20 divided by 6 is $3.33, but if they
subtract that from everybody's share, then the fifth man
and the sixth man would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to
reduce each man's bill by roughly the same percentage
he had put in, and he proceeded to work out the amounts
each should pay.
And so the fifth man paid nothing, the sixth pitched in $2,
the seventh paid $5, the eighth paid $9, the ninth paid $12,
leaving the tenth man with a bill of $52 instead of $59.
Outside the restaurant, the men began to compare their
savings. "I only got a dollar out the $20," declared the
sixth man pointing to the tenth, "and he got $7!"
"Yeah, that's right," exclaimed the fifth man. I only saved
a dollar, too. It's unfair that he got seven times more
than me!
"That's true," shouted the seventh man. "Why should he
get $7 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 he didn't show up for dinner, so the nine
sat down and ate without him.
When it came time to pay the bill, they discovered something
important.
They were $52 short!
++++++++++++++++++++++++
And that, boys and girls and college instructors, is how
Canada's 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 Switzerland and
the Caribbean.
last week and the conversation turned to the government's
recent round of tax cuts. "I'm opposed to those tax cuts,"
the retired college instructor declared, "because they
benefit the rich. The rich get much more money back
than ordinary taxpayers like you and I and that's not fair."
"But the rich pay more in the first place," I argued, "so it
stands to reason that they'd get more money back."
I could tell that my friend was unimpressed by this meager
argument. Even college instructors are a prisoner of the
myth that the "rich" somehow get a free ride in Canada.
Nothing could be further from the truth.
Let's put tax cuts in terms everyone can understand.
Suppose that everyday 10 men go to PJ's for dinner.
The bill for all ten comes to $100. If it was paid the way
we pay our taxes, the first four men 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.
The 10 men ate dinner in the restaurant every day and
seemed quite happy with the arrangement until 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. Now dinner for the table only costs $80."
The first four are unaffected. They still eat for free.
Can you figure out how to divvy up the $20 savings
among the remaining six so that everyone gets his fair
share?
The men realize that $20 divided by 6 is $3.33, but if they
subtract that from everybody's share, then the fifth man
and the sixth man would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to
reduce each man's bill by roughly the same percentage
he had put in, and he proceeded to work out the amounts
each should pay.
And so the fifth man paid nothing, the sixth pitched in $2,
the seventh paid $5, the eighth paid $9, the ninth paid $12,
leaving the tenth man with a bill of $52 instead of $59.
Outside the restaurant, the men began to compare their
savings. "I only got a dollar out the $20," declared the
sixth man pointing to the tenth, "and he got $7!"
"Yeah, that's right," exclaimed the fifth man. I only saved
a dollar, too. It's unfair that he got seven times more
than me!
"That's true," shouted the seventh man. "Why should he
get $7 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 he didn't show up for dinner, so the nine
sat down and ate without him.
When it came time to pay the bill, they discovered something
important.
They were $52 short!
++++++++++++++++++++++++
And that, boys and girls and college instructors, is how
Canada's 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 Switzerland and
the Caribbean.
So is that!....I want one for Halloween too!!!!...well not one that says robyn...lol
Comment