Human Nature and the Progressive Tax System

Abigail and Dolley readers the below is not original material, but it so aptly illustrates the human nature at play in the culture wars that I had to copy and paste.  The credit goes to C. Howell, although I am not sure if Howell is the original author.

Philosophy/Economic lesson 101:

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:

Random Picture from the Internet

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. "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 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 - the paying customers? 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 roughly the same amount, 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 paid $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 four continued to drink for free. But once 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!"

"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 got"

"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 man and beat the hell out of him...

The next night the tenth man didn't show up for drinks so the nine sat down and had 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, ladies and gentlemen, journalists, politicians 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier...and who could blame them? 

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

A Tale of Two Mothers

(The purpose of this tale is to demonstrate how choices we make effect our lives.  Please do not regale me with debate on the circumstances that formed and shaped mother #2.  That discussion is outside of the realm and scope of this piece.)

I want to present to you a tale of two Mothers.  I will play the first mother.  (That is a picture of me and my son when he was a day or so old, I am a heifer there, but he is so adorable...)

When my son was born, I wanted more than anything else in the world to stay home and raise him.  I had fantastic visions of outings to the park, learning to sew, gourmet cooking, and intellectually stimulating sessions with my child, who would of course be brilliant because of all the stimulation he received from Super Mom.  Alas, it did not happen.

I can not convey to you how difficult it was taking him to Day Care and going back to work.  I do not know if I have ever done anything harder in my life.  It was only after the Lord spoke to my heart and affirmed to me that HE loved my son even more than I and HE would be with him while I was away, that I was able to find the strength to do what I had to do.  Why go back, you ask?  Because, you see my son was born with a medical issue that we all knew would eventually require surgery.  My husband was a small business man and we could not go without health insurance, so I went back to work.  I sacrificed, I made the tough choices, I did not ask anyone to take care of me, I did it myself.

We struggled mightily during those Day Care years and as a consequence I never had another child.  I always wanted two kids, but I had to face the hard truth that the timing was never right, the money not there, and in the end I gave up that dream.  As a consequence, I stayed in the work force and now find myself extremely successful.  I work for a great company and enjoy a generous salary and benefits.  I have a Cadillac Health Plan., but I sacrificed for it.  I worked hard, I missed precious moments of my baby's life, I struggled, but I persevered and by the grace of God everything turned out just fine.  

 Now let's take another woman, she had four children and has never worked.  She lives in a lovely house that is paid for completely by alimony and child support.  They live in squalor.  Everyday on my way to work, I see her in her raggedy sweat pants walking the dog.  She lays around her house and Facebooks all day.  Yet, we are regaled by her absolute demand that Health Care is a RIGHT and she should be able to have it for free.

I am sorry, but that just makes me insane!  What has she sacrificed to earn healthcare?  Where am I every morning rushing around like a crazy women to get my son off to school and my butt to my job, while she lazes around her filthy house, drinking coffee, and writing status updates about why we should be giving her something!  Why should I, who has made very tough choices in my life now have to pay for her healthcare?  You give me one good reason why that should happen?  Now, not only will I have to pay for her healthcare, I am going to be taxed out the wazoo for the privilege.

You see, my husband and I are quickly finding ourselves in the "rich" category and will be mightily punished for our success.  How is that right?  It is theft pure and simple and it makes me mad enough to spit nails.

(Pictured:  My son and I after a 10 hour day at the office and two hour commute, painting the rock outside his school for his 8th Birthday.)   

More Ways to Get Your Money - Valuation of Textiles and Apparel from China

In a differentiation effort and a true desire to inform and educate, the Abigail and Dolley blog will try to not constantly reiterate and rant and rave about the same things all the conservative bloggers in the blogesphere are ranting about.  I am going to be reporting and commenting to you on items before and being considered by Congress that you will probably not read about elsewhere.  In my professional capacity, I have to keep up with current events that may effect my industry.  I stumbled upon this little tidbit last week.


The undervaluation of China origin textiles and apparel is thought to be a huge problem,
in part because the textile and apparel industry represents 21% of all importers, 5% of
the value of all imports, and 42% of all duties collected.

Thus, Customs and Border Protection will be investigating whether or not the value of the products coming into the country from China are fairly valued.  Up until now, I would have been fine with this.  Times have changed and I believe that the above move could be used solely for political gain and for gathering more money to the insatiable Federal Beast.

How it works is thus, each import into the USA has a declared value.  The Importer pays duty and taxes on the value of the product plus the applicable duty rates.  It is actually one of the only Constitutionally outlined and defined ways in which the Federal Government is allowed to tax you.  It is also important for American business to compete on level playing fields and not suffer through "unfair" trade practices that artificially make a competitors product less expensive.  Real cases like this would include foreign government subsidies to industries, prison or slave labor, large companies using predatory practices to run home industries out of business, but I digress.

The Government has limited leeway in raising duty rates for products because of global trade agreements and that type of thing sets off trade wars and all sorts of international attention - so in general, they don't like to do it.  Instead, they will take the valuation approach to accomplish the same goals.

This is how it works, if Customs determines that a t-shirt being imported is really worth $5.00 instead of $.50 then the duty and tax due on the product is increased greatly.  The importer will then of course, include the increase in cost to you - the consumer of the T-shirt.

The beauty of it for the Federal Government is that you will never know.