Taxes for Dummies

THE TAX SYSTEM EXPLAINED IN BEER

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? 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 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% savings).

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 got 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 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

Items for Congress to Consider Immediately

With sweeping GOP victories in the House, and across the country’s gubernatorial races, here are some ideas that congress should be taking a hard look at and vested interest in:

Term Limits. Why not limit them to a total of 8 years in either the House or Senate? This will clean house at least every 8 years and possibly every 4 years, preventing either party from building these entrenched political machines who's only goal appears to be getting re-elected, and ensuring their party's candidate gets in the White House. Force them to become focused on the business of the people.

Repeal Obama care! 25 percent of total spending by 2025? Seriously? The people didn’t want it to begin with, and it was passed via a procedural technicality called reconciliation. The members that “Deemed it passed”, (which is what happens with reconciliation) didn’t even read the bill. (Not to mention provided themselves with the ability to “opt out” of the program all together.

No lifetime pensions for any members of the Executive Branch except the president and vice president. (The rest of us Active Duty working stiffs and other Government employees have to serve for 20 years to qualify for 50% and 30 years for 100%) Why should these people receive a lifetime pension for service less than 20 years?

Congressman and Senators make more money then most Americans during their service, this is not unreasonable. The founders intent was that the House and Senate come from the people and return to the people. Presently they arrive in office, dig in and become wealthy while determining what the people can and can't do with their money and healthcare, while writing into law exemptions for themselves. No more congressional "opting out" of laws they seek to impose on the people.

Congressional Pay raises should be voted for BY THE PEOPLE, not by the members. That seems like a very clear conflict of interest to me.

No more pork added to bills. Bills must be introduced and passed individually, for the reason they were created. Bills should not be a place to hide projects that would otherwise NOT be funded. No more passing bills without them being read. If this means putting a limit on the complexity, or the amount of pages allowed in a bill so be it. Keep it simple stupid. We don’t need to pass laws that read like the tax code.

Defund and decommission all underperforming, cost overrunning useless government programs. Make congress identify and report the numbers to the people. Allow the people to vote on the creation of any new departments or offices.

No more Czars, congressional and public oversight or no job.

Expand drilling, and other forms of acquiring natural resources, nuclear energy programs, and coal fired plants while concurrently tightening up on safety and environmental hazard protections, and creating a driving force toward alternative and renewable resources.

Whoa that horse that is the EPA. They have gone far beyond common sense and practical, and its been going on for so long they don't know how to stop. (Environmental policies should be peer reviewed by NON governmental scientists to ensure appropriateness, effectiveness and validity)

Enforce border security and stop illegal immigration. Hold businesses that hire illegals accountable for the hiring of illegals through fines and other penalties. No more anchor babies.

To prevent the higher cost of employment being passed on to consumers through the price of goods, Cut Taxes! Move to a flat tax system, or a commerce only tax system. (On products SOLD not on products manufactured or the businesses manufacturing them) Such a tax system would collect taxes even from illegals, and those being paid "under the table." Every dollar spent on goods and services will return revenue.

No more bailouts. Pass a permanent law preventing the Federal Government from funding, bailing out, or otherwise keeping in business private enterprises and banks. That's how the system works, let it work. This will force banks and corporations to themselves be more fiscally responsible, and less apt to bow to unreasonable union demands.

Return U.S. Currency to the "Gold Standard", that is the U.S. Dollar being backed by something of real physical value. (Whether that be gold or other precious metals, or other products of value produced in the United States.) Protect our currency. No more writing checks on empty bank accounts. The people aren't able to do it, nor are States, so why should the Federal Government be allowed to?

Increase trade with other nations, and ensure fairness. No more special deals and incentives for them to trade with the U.S. unless the U.S. gets the same deals in return. Fair and equal marketing and trade practices or no deal.

Penalize American companies that send jobs overseas. Provide incentives for American companies to keep the jobs at home. The United States is capable of sustaining itself without dependence on foreign goods and services. We need to return to that standard.

Medical insurers must be free to compete in America. More options for care and more companies to choose from means competitiveness. That translates into better care at lower costs. It's how the system works once again.

The salaries of public educators should be directly proportionate to test scores. Underperforming teachers should be paid commensurately, or fired. Teachers AND Students should receive regular assessment test to ensure the Teachers know the subjects they are teaching and the students are learning what is being taught.

These are just a few of the things that Congress needs to look at immediately.

Why Sharia Law has no Place in American Courts

I wrote this on the 5th in response to reading the following article and the comments made regarding it.

http://www.foxnews.com/politics/2010/11/04/muslim-sues-oklahoma-anti-shariah-ballot-measure/?test=latestnews#dsq-new-post

Joshua Steen
5 November 2010

First let me begin by clarifying a common misconception about the Constitution of the United States, and “Separation of Church and State.” The Constitution makes no such provision, at least not in that precise language and the term is often mischaracterized as a Constitutional protection. This has been a source of debate for years, and was indeed ruled on by the Supreme Court which found that there IS a need for and a separation of church and state.

The intent of making that distinction is for clarity relating to the issue of Sharia Law being allowed in U.S. courtrooms, and not to spark a separate debate on the “Church and State” issue or how it should be interpreted as written in the Constitution.

The actual term “thus building a wall of separation between Church & State” was in a letter written by Thomas Jefferson to the Danbury Baptist association of Connecticut. This phrase is often misquoted, and certainly taken out of context. Here is the letter in its entirety:

To messers. Nehemiah Dodge, Ephraim Robbins, & Stephen S. Nelson, a committee of the Danbury Baptist association in the state of Connecticut.

Gentlemen

The affectionate sentiments of esteem and approbation which you are so good as to express towards me, on behalf of the Danbury Baptist association, give me the highest satisfaction. My duties dictate a faithful and zealous pursuit of the interests of my constituents, & in proportion as they are persuaded of my fidelity to those duties, the discharge of them becomes more and more pleasing.

Believing with you that religion is a matter which lies solely between Man & his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should "make no law respecting an establishment of religion, or prohibiting the free exercise thereof," thus building a wall of separation between Church & State. Adhering to this expression of the supreme will of the nation in behalf of the rights of conscience, I shall see with sincere satisfaction the progress of those sentiments which tend to restore to man all his natural rights, convinced he has no natural right in opposition to his social duties.

I reciprocate your kind prayers for the protection & blessing of the common father and creator of man, and tender you for yourselves & your religious association, assurances of my high respect & esteem.

Th Jefferson
Jan. 1. 1802.

As Thomas Jefferson was one of the framers, his interpretation is most likely accurate and correct and hence the source of confusion for the modern courts, since the Constitution doesn’t specifically use that precise language.

During his Presidency, Thomas Jefferson did not follow the example of the previous Presidents and refused to issue proclamations of Thanksgiving and Prayer, due to his belief that the Church and state should be separated. The problem is the modern interpretation of the concept lacks the nuances in Thomas Jefferson’s understanding of the issue.

That being said, there are several larger more defensible positions against Sharia Law in U.S. courts, which have constitutional basis. These articles completely remove the ambiguity of the 1^st Amendment (if any exists) and clearly and definitively prevent the institution of Sharia Law in ANY U.S. Court.

1. Article V of the Constitution prevents having to answer for a “Capital or otherwise infamous crime” without an indictment from a Grand Jury, and without due process of law. Sharia Law clearly violates the Constitution in that regard, particularly in cases involving women.

2. Articles VI, VII and VIII provide for speedy public trials, Jury trials and disallows cruel and unusual punishments. Does anyone dispute that beating a spouse or woman for some violation of Sharia Law, by a rod or hand to be cruel and unusual punishment? The U.S. would call that assault and has long since abandoned “the rule of thumb” as being acceptable practice.

3. Article IX preserves the rights of the individual. As such, if Sharia Law was somehow applied in a U.S Court, then the defendant could demand the right to a normal trial by jury.

4. Article XI: The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

5. Article XIII: Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

6. Article XIV: Section 1. No state can make a law that abridges privileges or immunities of citizens, nor deprive any citizen of life, liberty or property without due process. The state must provide equal protection under the law. Sharia Law by its very nature violates this article.

Using these articles and excluding the 1^st Amendment all together, removes any ambiguities regarding the institution of Sharia Law. As such, passing a law that bans the use of Sharia Law does in fact support the State’s Constitutional obligation to protect its citizens as provided for BY the Constitution.

Including the 1^st Amendment, while unnecessary, makes the “Freedom of Religion” argument moot, since the Oklahoma law does not preclude any Muslim from practicing their religion. The Oklahoma law does not prevent Muslims from practicing, or establishing their religion, nor does it abridge their freedom of speech. The law does nothing more than prevent the Muslims from imposing their religious laws into our legal system. The Oklahoma law provides for the separation of church and state. The church being separated in this case is the church of Islam.

The very nature of Sharia Law would cause the United States to take a giant leap backward, as it upholds the treatment of women as property, demands cruel and unusual punishments for all manner of infractions, including those that are very minor. Removes the rights and protections from women in cases of divorce, and demands that homosexuals be put to death.

Is this the direction we want American courts to take, even if these laws and rulings are only being applied to Muslims? What happens to a non Muslim citizen who becomes involved in some sort of dispute or altercation with a Muslim? Does the non Muslim forgo their rights and acquiesce to Sharia Law? What if the non Muslim in question is a woman, who is taken to court by a Muslim man?

Once you open the door to Sharia Law, you must then allow all other religions to have a separate set of laws tailored to their particular practice and beliefs. Equal protection under the law would be the driving Constitutional precedent for all religions getting their own courts.

References:

http://www.timesonline.co.uk/tol/comment/faith/article4749183.ece

http://www.jihadwatch.org/2010/07/sharia-courts-in-the-uk-these-privatized-legal-processes-were-ignoring-not-only-state-law-interventi.html

http://en.wikipedia.org/wiki/Separation_of_church_and_state

http://www.allabouthistory.org/separation-of-church-and-state.htm

http://www.usconstitution.net/jeffwall.html

http://www.trosch.org/moh/sharia-law.html

http://en.wikipedia.org/wiki/Sharia

http://www.answering-islam.org/Sharia/

http://www.religioustolerance.org/islsharia.htm

http://www.americanthinker.com/2005/08/top_ten_reasons_why_sharia_is.html

http://www.memri.org/report/en/0/0/0/0/0/0/1091.htm

http://www.loc.gov/loc/lcib/9806/danpre.html

http://www.bsos.umd.edu/gvpt/lpbr/subpages/reviews/Dreisbach104.htm

http://www.archives.gov/exhibits/charters/constitution_history.html

http://wiki.answers.com/Q/Who_wrote_the_US_Constitution

http://www.usconstitution.net/constfaq_q7.html

http://www.house.gov/house/Educate.shtml

http://www.gpoaccess.gov/constitution/

Taxes; It’s Math Dummy!

I always hear and read the same tired argument and statements from liberals regarding tax cuts and taxing the rich, however none of them can actually explain HOW it would work or help.

Conversely, if the rich have less taxes to worry about, they are more apt to spend their money and invest in ventures such as business creation, (Read job creation) and on luxuries such as gardeners, housekeepers, contractors for home improvements etc. (Again read jobs)

In case you are having trouble understanding out there in Lib land, that doesn't mean that the rich solely create new businesses. The rich can do and afford to do it a number of ways, two of which are 1. Creating the businesses themselves or 2. Investing in the average American with a great idea and good business plan. When their money is threatened, they protect it and hold on to it more tightly by cutting back on extras and using various methods to shelter it. (Rich folks can afford to do this with tax attorneys etc.)

What you Libs don’t seem to understand is that most of the middle and lower income families pay very little if any taxes as is, being that if you have a family with children and a mortgage, you get most if not all the money you paid in taxes back in your refund check every year.

The rich get no such breaks. The problem is that money is taken throughout the year, which causes most middle and lower income families to live paycheck to paycheck, with most or all of that refund check immediately going toward bills or debts, rather than discretionary spending. When the rich spend less, and are taxed heavily they are less willing to invest in businesses that may fail due to the economic situation, which means fewer jobs. This spans all sectors.

There is less demand for goods, further reducing jobs, (Those job losses are the average American jobs) which in turn reduces demand further, since no one can afford anything other than paying the necessities. This again reduces jobs, while at the same time inflating prices, further depressing the economy. The point and problem with all of this is that the only people affected, are the average American workers. The rich remain rich, and continue to protect their money. (They have families too)

Just a look back at history and doing some simple math will show you that increased taxes, (any kind) depresses an economy, no matter when or where it's done. Combine that with big government and excessive spending and what you get is bankruptcy. Just because I have checks left in my checkbook, doesn't mean I have money to spend. You libs don't seem to understand that. I can be arrested and prosecuted for writing checks without having the money to cover the amount. This doesn't seem to apply to the government, and it's a fairly common sense principle.

Tax cuts in the 1920s increased revenues 61 percent by 1928, President Kennedy (D) cut taxes and increased revenues by 62 percent, President Reagan cut taxes and increased revenues 99.4 percent in the 80s. Those figures are the increases in personal revenues collected. In each of these cases of tax cuts, the wealthy top 10 percent saw their tax burden increased from 44.2 percent to 78.4 percent, 11.6 percent to 15.1 percent and 48.0 percent to 57.2 percent respectively. The top 1 percent of the wealthy saw their burden increase from 17.6 percent in 1981 to 27.5 percent in 1988.

I haven't even listed the increases in GDP and personal wealth, manufacturing and general increases across the economy in its entirety. Tax revenues increase and the rich pay MORE taxes when tax rates are cut, with the middle and lower income Americans sharing far less of the burden.

By reducing taxes the rich do indeed get richer, putting them into the next higher tax bracket, increasing their tax burden. These  are facts, not rhetoric. You Libs need to wake up and take a basic budgeting class.