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Myths Debunked:
The Truth About Tax Cuts

 


 

Right wingers are passing around an email message meant to justify Bush’s tax cuts.  This is an answer to that message, so you may want to keep a link to it handy and send it to those who send you the original message.  Be sure to copy everyone who received the original message.

Here’s part of the original:

Subject:  The TRUTH about tax cuts

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.

That's what they decided to do. The ten men ate dinner in the 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.

In the nasty and brutish universe inhabited by right wingers, the men go on to argue about how much of a reduction each should get, and end up physically beating on the richest man, who then quits coming to dinner.

Fortunately, I live in a different universe.  In my universe, the men decide that there are at least a couple of ways to distribute the savings—or even increases in the price of the dinner, for that matter—equitably.  Maybe they actually consulted a woman on the matter.

One of the ways to distribute increases or decreases equitably is to use income growth as a measure.  The rich man’s income has grown much faster than the others, and in fact the four with the lowest incomes have even experienced a decrease in real income.  The richest man has also had the greatest growth in wealth accumulation.  After all, the poorest four spend everything they have on food and shelter for their families, the absolute minimum required for human existence, and have nothing left over.  The higher the men’s income, the more wealth they can accumulate.

The richest man also realized that he benefits disproportionately from the system.  He knew that the entire infrastructure of the country serves him as an individual, and also serves the companies he owns stock in.  He realized that he takes advantage of the educational system every time one of those companies hires an employee.  He understood that the companies he owns use government administrative functions and courts far beyond the needs of the poor.  He may even have seen that his companies aren’t paying their way completely.  Maybe those companies are polluting, rather than cleaning up their waste.  Maybe those companies aren’t paying a living wage to all of their employees, causing the need for extra social services provided by the government.

And the richest man realized, once he thought about it, that as smart as he was and as hard as he had worked—damn hard, as a matter of fact—there was still an element of luck in his financial success.  A lot of people were as smart as he, or even smarter, and had worked as hard as he, or harder, but hadn’t done as well.  So if good luck was part of his success, maybe bad luck was part of what made poor people poor.  Doesn’t he owe something back?  Of course he does, and his religion tells him so.  I say that with confidence, even though I don’t know what his religion is.  I say it because every major religion and moral philosophy demands that we help our neighbor.

This whole exercise taught the richest man that people with the lowest incomes don’t pay enough in taxes—because they don’t MAKE enough.  He resolved then and there to work with other rich people and employers to increase their incomes.  After all, the poor will then be able to buy more products made by his companies, and may even at some point be able to take pride in buying their own dinners.  And maybe another benefit of increasing incomes would be less crime, so the richest man could get rid of some of the watchtowers and searchlights protecting his property.

In my universe there was no need to beat up the richest man, or anyone else.  There was no need for anyone to quit coming to the restaurant.

As a matter of fact, I’m led to believe that they all lived happily ever after.

Carolyn Kay
MakeThemAccountable.com

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Last changed: December 13, 2009