[quote]ShaunW wrote:
heres a small story you might get something from
(sourced from an aust. investment forum). Seems relevant to the OP’s post.
You may have heard calls from across Australia: “It’s just a tax cut for the rich!”, and it is accepted as fact.
But what does that really mean?
The following explanation may help.
Suppose that every night, 10 men go out for dinner.
The bill for all 10 comes to $100. They decided to pay their bill the
way we pay our taxes, and it went like this:
All 10 were quite happy with the arrangement, until one day, the owner
said: “Since you are all such good customers, I’m going to reduce the
cost
of your daily meal by $20.” So now dinner for the 10 only cost $80.
The group still wanted to pay their bill the way we pay our taxes. The first four men were unaffected. They would still eat for free. But how should the other six, the paying customers, divvy up the $20 windfall so that everyone would get his “fair share”? They realised that $20 divided by
six is $3.33. But if they subtracted that from everybody’s share, then the fifth and sixth men would each end up being paid to eat. The restaurateur suggested reducing each man’s bill by roughly the same percentage, thus:
-
The fifth man paid nothing (like the first four) instead of $1 (100% saving).
-
The sixth paid $2 instead of $3 (33% saving).
-
The seventh paid $5 instead of $7 (28% saving).
-
The eighth paid $9 instead of $12 (25% saving).
-
The ninth paid $14 instead of $18 (22% saving).
-
The tenth paid $49 instead of $59 (16% saving).
Each of the six was better off, and the first four continued to eat for
free, as now did the fifth - but 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!”
“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. The nine sat down and ate without him, but when they came to pay the bill, they discovered that they didn’t have enough money between all of them to meet even half of
the bill! 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.
[/quote]
Like most stories, this never really happens.
This is real though: I should pay more tax, says US billionaire Warren Buffett | Business | The Guardian
"Warren Buffett, the famous investor known as the “Sage of Omaha”, has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: “The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It’s dramatic; I don’t think it’s appreciated and I think it should be addressed.”
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
“There wasn’t anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don’t have an accountant or use tax shelters. I just follow what the US Congress tells me to do,” he said."
And that my friends, is the truth they don’t want you to know.
Flat tax? BRING IT ON ! ! !