Trump Tax Plan Explained

Gofirstclass

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Apr 20, 2010
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Tri Cities, WA
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Suppose that every day, ten men go out for beer and 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 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 the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″.

” Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid $2 instead of $3… (33% saving).

The seventh now paid $5 instead of $7… (28% saving).

The eighth now paid $9 instead of $12… (25% saving).

The ninth now paid $14 instead of $18… (22% saving).

The tenth now paid $49 instead of $59… (16% saving).

Each of the six was better off than before. And the first four continued to drink for free.

But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” 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 received ten times more benefit 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. This new tax system exploits the poor!”

The nine men surrounded the tenth man and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
 
I'd love to be the 1st of the four men, however I know that after a while I wouldn't be invited to the bar anymore. (sarcastic humor)

(on a side note and more sarcastic humor)
After a few drinks I become the 10th guy (by choice) even though I'm on a 7th guy income. The next morning after I look in my wallet, I realize I knocked my bank account down to what I imagine the 5th has .:(
 
Thank you! I intend to use this and may even pretend it was my idea! :)
 
I’m glad someone has the time to ponder and write this stuff and then share it. It’s so friggen good and right on the money!
The new tax plan may not be perfect, as a matter of fact I think I may end up paying a little more. Not to happy about it but it’s right for the country and I love living here!
Happy New Year everybody!
 
It's not funny. 70% of the tax dollars the government brings in go out to pay for entitlement programs. The freeloaders are dragging our country down. We need to do something before it's too late. I don't like Trump. But he's the only chance this country has.
 
Maggie, he wouldn't have been my first choice but given the choices we were left with, IMHO he was the only choice.

It's amazing how our far left media has been so off the scale with their coverage. He kicked ISIS's butt in less than a year, something Obummer and Bush couldn't do in 10 years. Unemployment is down, investments are up, I could go on and on but you get my drift.

OH, and he was able to push through the best tax plan we've seen in decades. MAGA.
 
It's not funny. 70% of the tax dollars the government brings in go out to pay for entitlement programs. The freeloaders are dragging our country down. We need to do something before it's too late. I don't like Trump. But he's the only chance this country has.
Are you saying that 70% is going out to freeloaders?
 
Are you saying that 70% is going out to freeloaders?

I believe what he said was.

"It's not funny. 70% of the tax dollars the government brings in go out to pay for entitlement programs. The freeloaders are dragging our country down. We need to do something before it's too late. I don't like Trump. But he's the only chance this country has."

You're welcome.
 
Before WWI there was no income tax. It was introduced to pay for the war. At one time there was no unemployment insurance or social security. The list goes on. We have roads, police, armies and help for those without. There is only one source of revenue The People. If we all pay a fair share of tax the system work. If taxes are too high people feel working is not worth the effort. Over time most have been able to make more and based on my self I spend more. If I make too much I save some and the money is taken out of circulation. A tax break for the ultra rich will result in them saving more. They do not need a new boat. If the average person gets a tax reduction he will spend it and create work. Based on our experience in the US, 20 years ago it was inexpensive today it is more expensive than Canada for essential items but still less for non essential items. I have no idea if your new taxes will correct the problems but hope it does.
 
Not sure if the percentage of tax dollars going to entitlement programs is as high as 70%, but it’s up there, and it’s way too high. As is the cost to service the national debt.
But Social Security and Medicare are lumped in with entitlements and the vast majority of recipients of those two programs are not freeloaders by any means. They’re older Americans who spent their life paying into those programs and are collecting on the promises that the government made to them over their working lives.
I certainly believe that there is a lot of waste, fraud and abuse in entitlement programs and that coupled with untaxed “off the books” income and other wasteful spending is choking honest taxpayers, but not everyone collecting a benefit from the government is cheating. The government is the one that cheated and turned those in to pyramid schemes.
IMHO the way to start to even the playing field is to get the special interest money out of politics and impose 12 year limits for members of Congress to put an end to career politicians.
I’d go to a 3 tier flat income tax. Zero percent for individuals making up to 25k, married couples filing jointly up to 50k. Ten percent on everything earned by individuals above that. A 15% tax on business. No deductions or tax credits for anything or anyone.
New money contributed to Social Security by employees and employers should go in to IRA type accounts where the government can’t touch it or bankrupt it by using it for other entitlements. Make them call welfare what it is, make sure recipients really need it, and answer for who gets it.
There should also be heavy penalties for paying or receiving untaxed income, a 1-800 number set up to report people engaging in it, and IRS agents not needed to audit returns anymore because of the flat tax should be charged with investigating and prosecuting violators.
 
Before this thread takes a hard left turn, there are some things worth noting. GoFirstClass's original post has been around for a while and is more illustrative of our current tax system, and not necessarily the Trump Tax Plan. Income taxes, as we know them in the US, are a result of the passage of the 16th Amendment in 1913. Technically before WWI. Prior to the 16th amendment, the US had a flat tax to help defray the costs of the Civil War. That was ruled unconstitutional as it was not applied apportionately to the states based upon population. The 16th Amendment fixed that and gave the Federal Government the power to tax individuals. Remember, the government doesn't earn money. It takes money. It redistributes money, under the guise that the government knows better than you on how to spend your money. Cue the chorus on "what about military? what about infrastructure?". I think that we can all agree that some level of taxation is necessary.

Lastly, I agree with CarpeDiem that my taxes may go up a smidge due to the elimination of SALT, but I'm ok with that as it is the right thing to do. Think of it this way: if you lived in a state with low or no state income taxes and low property taxes, why are your subsidizing a high taxed state (like NY, NJ, CT, or CA) when they can deduct their state taxes off of their federal return? That's crazy. (Full disclosure: I've been taking advantage of it for the last 18 years). Doesn't make it right.

I have a suggestion for the high taxed states: Instead of asking the rest of the country to subsidize your high taxes on their Federal Return, why don't you allow your citizens to deduct their Federal Taxes from your State Tax Return? That way, we are all treated exactly the same on the federal level, and the individual states can choose how to handle their own finances. Remember, in the US, I am free to live in any state that I choose.

One more thing: the BEST thing about the Trump Tax plan is the modification of the AMT, imo.

Happy New Year everyone!

Jaybeaux
 
We could resolve alot of this if they just cracked down on the fraud. I know SEVERAL that play the system. One has never worked, the boyfriend gets arrested every month. She flew to FL and bought a brand new mini van and drove it back. Just bought her 4 year old son a brand new quad for X-Mas. She gets government assistance and pulled he ill grandmother out of the nursing home so she can take her monthly check too. Drive through the projects here and you see more new cars there than you do in a typical upper end neighborhood.
I have no issues with those that have earned it and paid in or those that truly are not able to work and deserve it. The girl I referenced above used to go to college and quit. She found she could make more by scamming the system. This is just one example of the many I know of.
 
70% of the tax dollars the taxpayers earned are going into the pockets of people who didn't earn it.
It's what Chris Christie said when he was running for president. No one disputed it.
It's possible Chris Christie doesn't know what he's talking about isn't it.;) The majority of 'entitlement' spending is social security and medicare. The population increasing in age is going to swell that up by around 40- 50% in the next decade or so. All you younger folks need to get to work so us old 'freeloaders' are taken good care of. :D

Ya' know us folks drawing social security ought to get free boat waxes and fuel stipends from the government...maybe a beverage stipend too. I'm going to talk to President Trump and see what he can do about that.
 
Typical attitude of people from your generation. You think your entitled to everything. Social security is the worst government program ever enacted. It's been so used and abused. My wife and I are in our early 40s we have both worked our butts off our whole lives. I have worked 12 hour days 7 days a week. But we know when we come of age to retire. social security will be so far in the hole there won't be anything left for us. But fortunately we worked and saved and invested enough so we'll be ok. We won't need the younger generation to take care of us. Why don't you give me your address? Maybe next Sunday after work I'll have a couple free hours. I can wax your boat.
 

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