Tax Cut Parable

How far the pendulum should swing with regard taxing the rich to subsidize the poor is a never-ending controversy.  While exact percentages vary depending upon the source, there is no doubt the wealthy pay a disproportionate share of taxes in the U.S.   Some estimates suggest 10% of U.S. taxpayers contribute 60% of the taxes collected, 30% pay 37%, and 20% pay 4%.  Others put the percentages wealthy taxpayers pay even higher.  Few question the need for those who are better off to pay a higher proportion to help those in need or to provide a social safety net.  The debate centers around what truly constitutes real need and where you draw the line on who is truly deserving of social welfare.  Many folks (particularly in California) never seem willing or able to grasp that, without fair incentives for those who truly drive the economic engine of growth — and, by the way, who also pay the bulk of the costs — you end up removing hidden subsidies that a large part of the populace have become overly dependent on.  The U.S. has evolved into a culture of entitlement and an addiction to welfare that will be difficult and painful to ever reverse.  I, for one, believe the following tax parable cuts to the chase.  I’d be interested in seeing a thoughtful counter to this parable.

A TAX CUT PARABLE - Every night, 10 men met at a restaurant for dinner. At the end of the meal, the bill would arrive.  They owed $100 for the food that they shared.  Every night they lined up in the same order at the cash register.  The first four men paid nothing at all.  The fifth, grumbling about the unfairness of the situation, paid $1.  The sixth man, feeling very generous, paid $3.  The next three men paid $7, $12 and $18, respectively.  The last man was required to pay the remaining balance, $59.

He realized that he was forced to pay for not only his own meal but also the unpaid balance left by the first five men.  The 10 men were quite settled into their routine when the restaurant threw them into chaos by announcing that it was cutting its prices.  Now dinner for the 10 men would only cost $80.

This clearly would not affect the first four men.  They still ate for free.  The fifth and sixth men both claimed their piece of the $20 right away.  The fifth decided to forgo his $1 contribution.  The sixth pitched in $2.  The seventh man deducted $2 from his usual payment and paid $5.  The eighth man paid $9.  The ninth man paid $12, leaving the last man with a bill of $52.

Outside of the restaurant, the men began to compare their savings, and angry outbursts began to erupt.  The sixth man yelled, “I only got $1 out of the $20, and he got $7,” pointing at the last man.  The fifth man joined in. “Yeah! I only got $1 too.  It is unfair that he got seven times more than me.”  The seventh man cried, “Why should he get $7 back when I only got $2?”   The nine men formed an outraged mob, surrounding the 10th man.  The first four men followed the lead of the others:  “We didn’t get any of the $20. Where is our share?”  The nine angry men carried the 10th man up to the top of a hill and lynched him.  The next night, the nine remaining men met at the restaurant for dinner.  But when the bill came, there was no one to pay it.