There was an article a few weeks ago, about a rich woman giving up her US citizenship and moving back to her family's place in Europe. By doing it, she would save multi-million dollars on tax.
The comments from readers (US citizens) on the article were mostly negative. Common response word was "despicable".
Following "tax fable" was among the comments. Apparently this "fable" has been circulating in the web for a while, although the author is unknown. An economics professor who was named as the author officially denied his authorship in his webpage.
This fable is so well written (I think). How about reading it first, if you have not read this?
A Tax Fable
"Suppose that everyday 10 men go to a restaurant for lunch. The bill for all ten comes to $100. If it were 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 lunch 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 lunch for the 10 would costs only $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings between 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 and the sixth man would end up being paid to eat their meal. The restaurant owner suggested that it would be only fair to reduce each man's bill by roughly the same amount that each paid and he started 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 of 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 man and beat him up. The next day he didn't show up for lunch, so the nine sat down and ate without him. But 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 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 Switzerland and the Caribbean."
That was the fable.
Until I read the fable, I was not certain how the tax system works in the US. Or, I am still not certain whether this fable actually reflects the real tax situation. But let's say it does for now.
You can draw different lessons from the fable, and it depends on which guy in the fable you are.
At least, this fable clearly demonstrates the face of unequal distribution of the wealth in this country.
Let's say, you are among the people who are paying $3 for the lunch. You'd be the sixth guy, a "middle class". Since you pay some for your lunch, you feel entitled to your lunch. After all, you work hard for it.
Now, in the middle, how do you feel toward these other guys?
You may feel some dislike against four freeloaders. "Come on, lazy bums. What are you doing?! Work to eat!"
Then, how do you like the richer, ninth or tenth guys? They are corporate tycoon or something. You may envy and to some extent you may want to know how they get that rich. perhaps? But there is no way you get that rich keeping your current ways. You know no matter how hard you work, you won't build that much wealth. Now you may be jealous. Maybe even frustrated and angry.
"The rich always get richer and the poor get poorer, the rich must be doing something despicable and predatory. That's not right. The unequal wealth distribution should be tamed in some ways. How about occupying Wall Street to change the situation? "
From the standpoint of the $0 paying four guys, it would not be easy either, would it? The sixth guy may be resentful and unfriendly. The nineth and tenth guys may not even talk with you, and certainly they wouldn't speak up for you. You may feel,"Damn! All they care is money!" Sure you get free lunch, but you get free lunch because you get nothing else. You get sick and hospitals won't even welcome you (unless the new health care law works out). You can't afford the bill. You can't get sick nor retire. When you work, you are other guy's cash cow. WTF.
How about you being the tenth guy? You are rich. You make your money because most other guys work for you. You pay for them, but you have established a system so that the money comes back to you (hehe). In other words, they hand over their money back to you. You built this system, and you will not give it up. The other guys may know the existence of the system. Probably because of that, although you are paying money to these guys, they look ungrateful. Still, on a downside, you take care of most of the bill. Ugh. You'd say, they should be grateful. And you want to keep it that way. You are outnumbered in Democratic mass-voting system. They would beat you up if you don't take care of their resentment and something comes up. Yikes.
At least, this fable clearly demonstrates the face of unequal distribution of the wealth in this country.
Let's say, you are among the people who are paying $3 for the lunch. You'd be the sixth guy, a "middle class". Since you pay some for your lunch, you feel entitled to your lunch. After all, you work hard for it.
Now, in the middle, how do you feel toward these other guys?
You may feel some dislike against four freeloaders. "Come on, lazy bums. What are you doing?! Work to eat!"
Then, how do you like the richer, ninth or tenth guys? They are corporate tycoon or something. You may envy and to some extent you may want to know how they get that rich. perhaps? But there is no way you get that rich keeping your current ways. You know no matter how hard you work, you won't build that much wealth. Now you may be jealous. Maybe even frustrated and angry.
"The rich always get richer and the poor get poorer, the rich must be doing something despicable and predatory. That's not right. The unequal wealth distribution should be tamed in some ways. How about occupying Wall Street to change the situation? "
From the standpoint of the $0 paying four guys, it would not be easy either, would it? The sixth guy may be resentful and unfriendly. The nineth and tenth guys may not even talk with you, and certainly they wouldn't speak up for you. You may feel,"Damn! All they care is money!" Sure you get free lunch, but you get free lunch because you get nothing else. You get sick and hospitals won't even welcome you (unless the new health care law works out). You can't afford the bill. You can't get sick nor retire. When you work, you are other guy's cash cow. WTF.
How about you being the tenth guy? You are rich. You make your money because most other guys work for you. You pay for them, but you have established a system so that the money comes back to you (hehe). In other words, they hand over their money back to you. You built this system, and you will not give it up. The other guys may know the existence of the system. Probably because of that, although you are paying money to these guys, they look ungrateful. Still, on a downside, you take care of most of the bill. Ugh. You'd say, they should be grateful. And you want to keep it that way. You are outnumbered in Democratic mass-voting system. They would beat you up if you don't take care of their resentment and something comes up. Yikes.
As election season approaches, there will be many political comments in the web and in Facebook posts. When I read these comments, I try to guess which guy is making the comment, just for fun. Is he the $3 paying sixth guy? First four? Seventh? If we assume they speak for themselves, their comments would reflect their positions.
Speaking of Presidential election, I know Mitt Romney is super-rich 10th guy. I wonder who he is speaking for.
Our moving is almost complete. I'm beginning to like our new place.
Speaking of Presidential election, I know Mitt Romney is super-rich 10th guy. I wonder who he is speaking for.
Our moving is almost complete. I'm beginning to like our new place.
