CLEAR EXPLANATION OF TAX CUTS

Sometimes politicians, journalists and others exclaim; "It's just a taxcut for the rich!" and it is just accepted to be fact, withoutquestioning it. But what does that really mean?Just in case you are not completely clear on this issue, the followingmight help. Let's put tax cuts in terms everyone can understand.Suppose that every day, ten men go out for beer and the bill for allten 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 would pay $7.The eighth would pay $12.The ninth would pay $18.The tenth man (the richest) would pay $59.So, that's what they decided to do.The ten men drank in the bar every day and seemed quite happy with thearrangement, until one day, the owner threw them a curve. "Since youare all such good customers," he said, "I'm going to reduce the cost ofyour daily beer by $20. "Drinks for the ten now cost just $80.The group still wanted to pay their bill the way we pay our taxes sothe first four men were unaffected. They would still drink for free.What about the other six men, those paying the tab? How could theydivide the $20 windfall so that everyone would get his 'fair share?'They realized that $20 divided by six is $3.33. But if they subtractedthat from everybody's share, then the fifth man and the sixth man wouldeach end up being paid to drink his beer. So, the bar owner suggestedthat it would be fair to reduce each man's bill by roughly the sameamount, 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 pay $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 fourcontinued to drink for free. But once outside the restaurant, the menbegan to compare their savings. "I only got a dollar out of the20, "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 I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? 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 drinks, so the nine satdown and had beers without him. But when it came time to pay the bill,they discovered something important. They didn't have enough moneybetween all of them for even half of the bill!And that, boys and girls, journalists and college professors, is howour tax system works. The people who pay the highest taxes get the mostbenefit from a tax reduction. Tax them too much, attack them for beingwealthy, and they just may not show up anymore. In fact, they mightstart drinking overseas where the atmosphere is somewhat friendlier.

Merry Christmas!