The Evil Rich Guy

Abigail and Dolley readers I have been on the road for the last few weeks visiting customers.  The life blood of my branches with this new company is small and medium sized clients.  All of these customers are "small business people".  Their desks are cluttered with paper, they have care lines etched upon their faces, they are living on coffee and cigarettes, and they are trying to keep their employees employed and their doors opened.

One of the clients was a couple of High School buddies who got an idea for a product and launched a firm.  One of the clients was a third generation in a family business that started out as his grandfather's general store.  Another was a man who had worked in corporate America for years and started his own firm.  All of them are hanging on, all of them are frustrated with the new environment in this country, and all of them said they would like to source in the USA but can't find anyone to manufacture their products.

We have to get out of these people's way.  We have to stop punishing their success with punitive taxes and adding to the cost of doing business.  We have to stop blaming these people for their success and we have to reward them for who they are and what they do.

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:

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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.