The following is a reprint from a response Older and Wiser gave to my message about how some will never understand tax cuts. 

This is great stuff!  Older and Wiser can be found at:  Older & Wiser blog

sharptalk

 

I received this from a friend... after reading it said to myself... yes...this makes sense.....PLUS it follows the old K.I.S.S. formula. I think you will find it interesting! Blessings Older and Wiser Taxes Explained Often liberal Politicians exclaim; "It's just a tax cut for the rich!", and it is just accepted to be fact. But what does that really mean? Just in case you are not completely clear on this issue, we hope the following will help. Tax Cuts -- A Simple Lesson In Economics This is how the cookie crumbles. Please read it carefully. Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. 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 $7. The eighth $12. The ninth $18. The tenth man (the richest) would pay $59. So, the ten men ate dinner in the restaurant 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 meal by $20." So, now dinner for the ten only cost $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 eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'? The six men 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 eat their meal. So, the restaurant 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 eat 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 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, so the nine sat down and ate 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 college professors, is how our tax system works. The ones who get the most money back from a reduction are those who paid in the most. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Europe and the Caribbean

The Democrats leader in the Senate, Harry Reid, strutted before the cameras and crowed, "We killed the Patriot Act". Flanked by all of the significant Democratic leaders in Congress they bathed themselves in the glory of stopping the warrantless searches, the phone record searches, the financial searches of would-be terrorists.

In Britain, a far-worse than September 11th terror plot was foiled because of intercepted calls and transaction surveillance.

Had the New York Times known about it, they would have tipped off the terrorists - of course, in the interest of free speech, and Democratic leaders would have called for resignations of all those involved in the dastardly enterprise of tracking terrorist communications and finances.

Thank God the Democrats failed this time.

Thank God George Bush was President and not John Kerry.

sharp

So, all of those who called the President a liar for forecasting a higher deficit in November than he does now must also now be calling the CBO a pack of partisan liars. Might as well call their sidewalk a liar.

The CBO announced a reduction in their forecast of the deficit from 371 billion (released in March) to $260 billion (released in August).  What has happened?  Tax cuts have dramatically grown tax receipts.

The argument is the same every time and the tax cutters are right every time.  When you cut taxes you spur growth and grow overall tax receipts.  It happened in the 1960's with JFK, it happened in the 1980's with Reagan and it happened again in this decade with Bush.  But those who don't want to believe that and more, don't want you to believe that, will divert attention with the actual deficit numbers.

I would suggest that the surpluses of the 1990's were the product of two things: 

1) a massive reduction in military spending, for which you eventually have to pay and,

2) a hostile Congress that woudn't spend money for President Clinton (remember the gov't shutdown?).  We may be headed for more of those days with a Democratic Congress.

The current deficits are quite small (only 2% of GDP - far smaller than historic averages or European country deficits of 3+%) especially when you take into account the wars in two countries, a bloateed medicare bill, a massive farm bill, a massive highway bill, hurricane Katrina and the recession that even Al Gore has said started in the spring of 2000.

So, there we are.  Tax receipts grow.  More Americans work.  Future defecits go down (CBO to release a 10 year update on August 17th) and American capital spending surges to create sustained competitiveness and future growth.

What if George Bush hadn't ruined the economy?

sharptalk

It was great to hear those Islamic Imams step up and condemn the attempt at mass murder of innocents in Britain today.  And the continued slaughter of innocents in Iraq.  And in Pakistan.  And in Israel and Lebanon.

Wait a minute.  They condemned only Israel - when Israel bombed Lebanon after being attacked.  But there's been nothing about all the other Arab and Israeli deaths and the attempts on British and American lives.

Guess mainstream Islam is giving tacit approval.

What else could we believe?

sharptalk

Now it's going to be an even bigger hassle to fly.

They should make them stand in line and constantly get inspected as their punishment - for 50 years. Poetic justice. sharptalk