The Parable of 10 Men in a Bar

Not a Bible parable, obviously, but one of the best analogies I’ve ever seen to explain the downfall of Socialist taxation policies.

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. ‘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 and beat him up.

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 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.

[Found on the Internet, here's what Snopes has to say about the authorship.  Regardless of who wrote it, it explains the concepts very well.]

The tenth man represents the top 10% of income earners.
From 1993 to 2005 the total income tax share (as a percentage) paid by the “tenth man” has ranged from 59% in 1993 to over 70% in 2005:

tax year % paid by “Tenth Man”
1993 59.24
1994 59.45
1995 60.75
1996 62.51
1997 63.20
1998 65.04
1999 66.45
2000 67.33
2001 64.89
2002 65.73
2003 65.84
2004 68.19
2005 70.30

Source: IRS (archived here)

The Bush tax cuts, which the MSM (Marxist Socialist Media) called “tax cuts for the rich”, actually INCREASED the percentage of the total income tax share paid by the top 10% of income earners…the “tenth man”. Don’t get me wrong…I think the Bush tax cuts are a good thing. They are like the bar owner reducing the price from $100 to $80. What I am against is the MSM distortion of those tax cuts as somehow “unfair” to the people who either pay no taxes at all or pay a very small amount. The MSM encourages the 9 men to beat up on the tenth man, and that’s just stupid. Here is a real-life example of what happens when the tenth man decides he’s had enough and he’s leaving…

“Spreading the wealth around” never results in a better outcome for people.  It always results in destruction.

Case study: Zimbabwe.

There are two groups that can take money away from you:
Thieves and the Government.

Sometimes it’s hard to tell them apart.

The thief does not come except to steal, and to kill, and to destroy. I have come that they may have life, and that they may have it more abundantly.

John 10:10

Jesus said to him, “I am the way, the truth, and the life. No one comes to the Father except through Me.

John 14:6

=====================

UPDATE:

The IRS numbers shown above, from http://www.irs.gov/pub/irs-soi/05in05tr.xls, were up through 2005. The most recent file that I can find is through 2009: http://www.irs.gov/pub/irs-soi/09in05tr.xls

In 2009, the tenth man paid 70.47% of the Income Tax bill. (Up from 70.30% last reported in 2005, and significantly higher than the 59.24% that it was in 1993, the first year of the Clinton Presidency, or the 54.69% that it was in 1986, the 6th year of Ronald Reagan’s Presidency.)

Take a look at how much of the Income Tax Bill has been paid by “the tenth man” at different points over the last 25+ years:

tax year % paid by “Tenth Man”
1986 (6th year of Ronald Reagan Presidency) 54.69%
1989 (1st Year of George H. W. Bush Presidency) 55.78%
1993 (1st Year of Bill Clinton Presidency) 59.24%
1997 (5th Year of Bill Clinton Presidency) 63.20%
2001 (1st Year of George W. Bush Presidency) 64.89%
2005 (5th Year of George W. Bush Presidency) 70.30%
2009 (1st Year of Barack Obama Presidency) 70.47%

Source: IRS

The tenth man has gone from paying $54.69 of the $100.00 bar tab in 1986, to paying $70.47 of the $100.00 bar tab in 2009.

That $15.78 increase represents a nearly 29% increase… ($70.47 – $54.69) = $15.78, and ($15.78 / $54.69) =  28.8% increase.

The example in the parable above, with the 10th man paying $59 of the $100 bar tab, was correct in 1993.  Today, the tenth man pays over $70 of the $100 tab.  And many of the other 9 beer drinkers, especially many of those who drink for free or get paid to drink(!), are beating up on the tenth man.

And now, with talk about Keeping the Bush Tax Rates for everyone EXCEPT the tenth man, and making only the 10th man go back to the higher Clinton Tax Rates, the 10th man would pay an even higher percentage of the total Income Tax bill… perhaps as much as 75% of the bill or more.

I think what would be “fair” would be for our Government to follow the Biblical tithing example, and have everyone contribute 10% of their annual income, regardless of the source of that income, and regardless of their income level. That is both fair (because everyone would pay the exact same rate) and has the wealthy pay more than the middle classs and/or the poor.

UPDATE:
Here is another real-life example of what happens when the tenth man decides he’s had enough and he’s leaving…

UPDATE:
As Jazz Shaw predicted, higher cigarette taxes in NY have led to LESS revenue, more expenses, bigger government, more crime, and more harm to legitimate businesses.

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52 Responses to The Parable of 10 Men in a Bar

  1. Isolden says:

    I heard this first on Rush’s show and thought it a very appropriate analogy. Wish more ppl knew about it – pass it on -

  2. ozarksky says:

    This is great!!! It’s so simple…yet BHO just doesn’t get it. Or…perhaps he does…get us all drunk (for free) and have his way with us. Count me out!!

  3. sweetakin says:

    While sitting at our coffee table with my 8th grader studying for an upcoming test, political news was on the t.v. in the background. My son was observing the treatment of “Joe the Plumber” and asked why people (media) were bashing him for asking a question. After my explanation, my son remarked, “Mom, that would be like me making 100 on my test, a classmate making a 25, my teacher taking points away from me, and giving them to the other student all so that our grades would be equal. But then we’d both fail.”

    I replied, “Yes, but maybe that would be fair.” To which he replied, “Or maybe he/she didn’t study, or better yet, didn’t even care to study because he/she knew they would get some of my points. In that case, why should I study?” To which I replied, “Bingo son, you get it.”

    P.S. Bless you for the “shout out” on MM! You’re terrific! I understand that this time of year she would be inundated with trolls, so I will continue to read and learn.

  4. sweetakin,
    Your son is wise! You have taught your children well.

    Thank you for your kind words.

    Sincerely,
    Red Pill.

  5. Technically, there is a minor error in the parable above.
    If you add it up, the discount was actually $21 dollars and the bill was $79 dollars:

    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).

    If anyone wants to be a stickler and keep the discount to $20 and the bill at $80, what would likely happen is that the tenth man would now pay $50 (a 15% savings from his original $59).

    The fifth man, like the first four, now paid nothing… i.e.,
    The fifth man now paid $0 instead of $1 (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 $50 instead of $59 (15% savings).

    And the other nine guys would still beat him up for getting $9 of the $20 discount!

  6. And, of course, the “Earned Income Creditactually does pay the poorest to drink beer!

    They don’t just pay zero taxes. They get paid money by the IRS!

    Your tax dollars at work, thanks to the Socialists in Washington, D.C. who like to Spread the wealth around…

  7. Danielle Bruno says:

    I read this to my classmates a my school. I am only a freshman and I understand this. I agree with the situation that was given. People who don’t have a lot of money shouldn’t get angry with people who are rich. The rich pay for most of the tax problems or requests. If it weren’t for them, where would you be? Instead of beating the wealthy, thank them. people who are not wealthy, or rich, shouldn’t get more money. Most who argue about the rich receiving more money, don’t pay at all. I don’t think that’s right. The ones that don’t pay at all, are getting the best. The rich are saving them from losing everything. If more people thought of others instead of themselves. We wouldn’t have this problem. I am only 14, and I think people who think that they deserve more than the rich, when they are unwealthy, are so immature and need to get a news flash. The thing is, the more rich people you hate, or beat up in this situation, the worse the tax and our lives will be. The rich are saving our lives. So i say, “Three cheers for the wealthy!” How about you?

  8. Danielle,

    Thank you for your comment. I’m very glad that you understand this.

    Not only do the wealthiest ten percent (the “tenth man”) pay about 70% of the tax burden, they also contribute a majority of the money received by charities.

    While there are “greedy” people at all income levels, the wealthy are often characterized as “greedy”, even when they give very generously.

    What is greedy is the current tax system. The whole “spread the wealth” concept is nothing more than greed…steal from the rich to give to the poor… Robbing Hoodlum, also known as Robin Hood.

    Government is notoriously inefficient. It is much better to let people freely donate to the charities of their choice, which do a much better job of meeting people’s needs efficiently, than it is to raise taxes and have the government try to meet people’s needs.

    The MSM likes to demonize the wealthy if they are conservative, but wealthy liberals (like Hollywood stars) are used as spokespeople for the Socialist agenda.

    Rather than demonizing the wealthy, those who envy the wealth of others should do everything they can to study those people, learn the success habits that helped them become wealthy, and then go in business for themselves and try to create their own wealth.

  9. I was watching an episode of The West Wing one time, back during the few seasons when things weren’t so “partisan”, and heard Rob Lowe’s character defend “the rich” to some of his fellow Democrats. He said that, before he worked in the White House, he’d been a high-rise, blue chip lawyer, and that he used to cringe whenever he would hear people talk about how the rich needed to pay their fair share; because, under the progressive tax system, he had paid the fair share of himself and 26 other people.

    In another episode, two characters are debating the merits of the estate tax, aka the death tax. One points out that people wealthy enough to be affected by the tax have already paid taxes on their estates when they paid income and capital gainst taxes on the revenue that paid for the estate, and when they paid property taxes for the time that they owned it. Another character, defending the death tax, points out that the vast majority of estateholders would never have to pay the tax and that the ones who would are “loaded”. The first one comes back at him with “You think that, just because they can afford a tax, it should be levied?”

    The West Wing may have been crewed by liberals and starred liberal actors and featured liberal characters, but there were quite a few conservative principles that managed to rise to the surface. Watching it all those years actually helped me shape my (mostly) conservative philosophy; especially on taxes.

  10. Stephen,

    Thank you for your comment.

  11. Lefty says:

    Here’s a different way of looking at this: the only reason the tenth man didn’t get his beating a lot sooner was because he was pitching in so much for the beer.

  12. (This is an independent comment, and not a response to Lefty).

    The nine men beat the 10th man up because he got the biggest tax break. By the original story, he got $10 of the $20 (really $21) discount. By my modified version of the story, he got $9 of the $20 discount. So, either way, he got 45% to 50% of the discount / tax break, while 5 of the other guys split varying portions of the remaining discount, and 4 guys got no discount at all because they weren’t paying anything to begin with.

    When tax breaks are discussed in the media, the focus is always on how the “rich” get bigger (implied “unfair”) tax breaks. The whole point of this parable is to show why those who pay the most taxes deserve the biggest portion of any tax breaks.

    But, instead of looking at the size or percentage of tax breaks the “10th man” gets, look at the percentage of the total tax burden they paid both before and after the discount was applied.

    ——————————————————-
    % of bill paid by each man BEFORE the discount:
    1st man: 0%
    2nd man: 0%
    3rd man: 0%
    4th man: 0%
    5th man: 1%
    6th man: 3%
    7th man: 7%
    8th man: 12%
    9th man: 18%
    10th man: 59%
    ——————————————————-
    ——————————————————-
    % of bill paid by each man AFTER the discount:
    1st man: 0.00%
    2nd man: 0.00%
    3rd man: 0.00%
    4th man: 0.00%
    5th man: 0.00%
    6th man: 2.50%
    7th man: 6.25%
    8th man: 11.25%
    9th man: 17.50%
    10th man: 62.50%

    So, even after receiving the biggest percentage of the tax break, the 10th man actually ended up paying a BIGGER percentage of the total bill (it increased from 59% of the bill to 62.50% of the bill).

    And that is exactly why the percentage of the total tax burden that is paid by the “10th man” (the top 10% of income earners) was actually BIGGER after the passage of the “Bush Tax Cuts”.

    Now, the “progressives” want to keep the Bush Tax Cuts for the middle class, but allow them to expire for the “10th man”. So, the 10th man would pay an EVEN BIGGER percentage of the total bill / tax burden.

    Let’s continue the bar example. The discount / tax cut for the 10th man is allowed to expire, while it is kept for the others. The total bill now rises from $80 to $89, with the men now contributing the following dollar amounts and percentages of the total bill:

    1st man: $0.00, 0.00%
    2nd man: $0, 0.00%
    3rd man: $0, 0.00%
    4th man: $0, 0.00%
    5th man: $0, 0.00%
    6th man: $2, 2.25%
    7th man: $5, 5.62%
    8th man: $9, 10.11%
    9th man: $14, 15.73%
    10th man: $59, 66.29%

    So you see, the “progressives” want to “soak the rich” even more! Before the discount, the “10th man” paid 59% of the bill, after the discount, the “10th man” paid 62.50% of the bill, and now the “progressives” want to make the “10th man” pay 66.29% of the bill!

    Heck, if always making the “10th man” pay a larger percentage of the total burden is such a great idea, why don’t the “progressives” just go for it all and make the “10th man” pay 100% of the taxes?

    Because that would be like turning up the heat all at once instead of raising it slowly. The proverbial frog would jump out of the pot instead of being simmered. The wealthy would leave the country, just like the 10th man left the bar, and we wouldn’t even have half of the tax revenue we used to have.

  13. You can see from the actual IRS data shown and linked above, the percentage paid by “Tenth Man” increased from 59.24% in 1993 to 70.30% in 2005.

    If the “Bush Tax Cuts” are allowed to expire for only the “10th man”, but are kept in place for everyone else, then the percentage of the total tax burden paid by “Tenth Man” will be even higher… perhaps as high as 75% or higher.

  14. Must see:

    “The issue is never the issue. The issue is always the revolution…”
    (…The Communist Revolution)
    “Deconstructing Capitalism”…

  15. Michael Gan says:

    The divide between the very rich and the rest is getting wider. In 1986, the Adjusted Gross Income (AGI) (current dollars) of the top 10% was $886,510 mill. and by 2005 it was $3,487,010 mill., an increase of 393%. For the top 11% to 50%, the AGI in 1986 was $1,217,059 mill. and in 2005, it was $3,057,814, an increase of 251%.

    The tax rate for all is lower in 2005 compared to 1986, however, the very rich got less of a reduction in percentage terms. In 1986 the average rate of tax for the top 10% was 22.6% versus 18.8% in 2005, a reduction of 16.8%. For the 11% to 50% group, it was 11.7% in 1986 versus 8.1% in 2005, a bigger reduction of 30.5%

    Based on IRS figures provided by tooktheredpill

  16. Republicans should have held up everything in the Lame Duck portion of the 111th Congress until Obama made the Bush Tax Cuts PERMANENT. Instead, they allowed a temporary extension, gave Obama almost everything else that he wanted during the Lame Duck, and now Obama is already trying to reneg on his part of the deal by undoing the Bush Tax Cuts and raising some of the very taxes that had been cut in the Bush Tax Cuts.

  17. Pingback: Obama: He’s Not a Centrist, But He Plays One On TV « I Took The Red Pill (and escaped the Matrix)

  18. This a great reason why we don’t need to raise taxes

  19. Cynthia,

    Thank you for your comment.

    And here’s a reminder from HotAir.com and the Wall Street Journal:

    Let’s not forget Obama’s already-imposed new taxes

  20. Repeating and emphasizing portions of my comments from December 6, 2010 at 4:14 pm and 4:36 pm…

    In the “Parable of 10 Men in a Bar” example:

    1) Before the discount, the “10th man” paid 59% of the bill,

    2) After the discount, the “10th man” paid 62.50% of the bill, and

    3) Now the “progressives” want to end the “tax cuts for the rich” and make the “10th man” pay 66.29% of the bill!

    From the actual IRS data shown and linked above:

    1) The percentage paid by “Tenth Man” in 1993 was 59.24%

    2) After the “Bush Tax Cuts”, the percentage paid by “Tenth Man” in 2005 was 70.30%.

    3) Now the “progressives” want to end the “tax cuts for the rich” and make the “10th man” pay close to 75% of the bill!

    If the “Bush Tax Cuts” are allowed to expire for only the “10th man”, but are kept in place for everyone else, then the percentage of the total tax burden paid by “Tenth Man” will be as high as 75% or higher.

    How exactly is that “fair”, that 50% of the population pays no income taxes at all (and some are even paid money from the taxpayers in the form of deceitfully-named “Earned Income Credit”)?

    And how exactly is that “fair”, that 10% of the population should pay 75% of the taxes?

    It’s time for a truly Fair Tax.

  21. Joey says:

    w o w .

  22. I’ve also grown tired of “progressives” claiming that the Bush Tax Cuts “cost” us money and “added to the debt”.

    The truth is that the Bush Tax Cuts lead to an increase in employment and an increase in tax revenues!

    In just 4 years, the 2003 Bush Tax Cuts led to revenues that were 44% LARGER! (Fiscal Year 2007 revenues were 44% bigger than Fiscal Year 2003 revenues.)

    The Bush Tax Cuts led to smaller deficits, not larger deficits.

    What led to larger deficits was a huge increase in spending after Democrats won control of the House and Senate and majority control of the budget starting with Fiscal Year 2008.

  23. In a signature swipe at the nation’s growing income gap, Obama called for a new minimum tax rate of at least 30 percent on anyone making over $1 million. Many millionaires – including one of his chief rivals, Republican Mitt Romney – pay a rate less than that because they get most of their income from investments, which are taxed at a lower rate.

    “Now you can call this class warfare all you want,” Obama said, responding to a frequent criticism from the GOP presidential field. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

    Obama calls this the “Buffett rule,” named for billionaire Warren Buffett, who has said it’s unfair that his secretary pays a higher tax rate than he does. Emphasizing the point, Buffett’s secretary, Debbie Bosanek, attended the address in first lady Michelle Obama’s box.

    Even with current tax rates, the top 10% pay a much higher percentage of the total tax burden. Warren Buffet pays many times more in taxes than his secretary does.

    Obama’s proposal seeks to make the top 10% pay even more of the total tax burden. Obama thinks “soak the rich” is “fair”. Obama’s proposal, however, would only lead to DECREASED investment, which in turn would lead to an even WEAKER economy. Job creators who have to send more money to the IRS and pay a higher tax rate on investments will INVEST LESS, meaning FEWER JOBS, HIGHER UNEMPLOYMENT, and DECREASED REVENUE to the IRS because fewer people will be paying payroll taxes.

  24. ethan freud says:

    im fourteen and this is scary. where will this leave my kids in 20 years

  25. “…facilitate some redistribution because I actually believe in redistribution…”

    – Barack Obama, October 19, 1998

  26. Sometimes I wonder if The Blaze staff read my blog.
    I wrote this post almost 4 years ago (October 22, 2008), and today I saw:

    Glenn Beck Demystifies Tax Code in Thought-Provoking Segment: ‘What’s Fair?’
    Posted on October 17, 2012 at 1:25am by Tiffany Gabbay

    http://www.theblaze.com/stories/glenn-beck-demystifies-the-tax-code-in-thought-provoking-segment-whats-fair/

    Thank you for spreading the message to a much wider audience.

  27. The most recent numbers I’ve been able to find at the IRS:

    http://www.irs.gov/pub/irs-soi/12inwinbulratesshare.pdf

    Go to page 40 of 50 in the PDF (the printed page number actually says it’s page 58, but in the PDF it is page 40 of 50).

    The Total income tax share (percentage) paid by the top 10% has increased since the passage of the Bush Tax Cuts, and for the last five years of available data (2005 – 2009), the percentage of the total tax bill paid by the top 10% has averaged over 70.54% of the bill.

    The IRS shows that for 2009, the top 50% paid 97.75% of the tax bill, meaning that the bottom 50% paid just 2.25% of the tax bill.

    And I’ll repeat what I said in an earlier comment back on December 6, 2010 :

    If the “Bush Tax Cuts” are allowed to expire for only the “10th man”, but are kept in place for everyone else, then the percentage of the total tax burden paid by “Tenth Man” will be even higher… perhaps as high as 75% or higher.

  28. Pingback: “Balanced” | I Took The Red Pill

  29. Scott Lago says:

    A report researched and written in 2010, http://www2.ucsc.edu/whorulesamerica/power/wealth.html, details how 20% of Americans posses and control about 89% of the finanicial and natural resourse wealth. That means that the remaining 80% of Americans get to wrangle over the 11% remaining. It seems to me than that the 20% should pay 89% of the national tax. And lets face it…..this last financial disaster was caused by that upper 20%. They increased the number of poor and left thousands of “fellow” Americans homeless in this nation and pocketed bonuses paid for by the taxpayer. I’m afraid I do not see the “real life” connection this parable is supposed to expose and have no sympathy for the “greedy” rich!

  30. Scott,
    I think it is “greedy” for you to think that you should be able to use the power of the government to pick someone else’s pocket. I believe in charity. I believe in helping those who truly need help. I believe that Jesus Christ is Lord. I believe that I should be able to give where and how I feel led to give, and that the government should not take that money, waste a lot of it, and then give it out to their cronies.

    I believe in a society where EVERY able-bodied person contributes to the best of their ability, and gives an equal percentatage of their resources to those truly in need.

    I have little sympathy for those who could contribute, but instead expect someone else to give them money for housing, money for food, free cell phones, etc.

  31. Scott Lago says:

    you seem to be a person of many assumptions. my point wasn’t about the “redistribution” of wealth….it was on the taxing of wealth. and in case you haven’t noticed…the last financial crisis was a result of the “truely greedy” taking advantage of the less fortunate. I sincerely doubt that they are concerned about giving back to the people whose “pockets they have picked”. Since the decline in unions and union participation in this nation there are no organizations in place to protect those “hard working” Americans who were forced to take pay cuts to enrich the “owners” and managers. I’m sure you are not interested in them either. so tell me…who can the people turn to in protection from the “crony capitalists”? The church? I don’t think so…if they wanted to they would have by now. Instead, they are mum outside their pulpits. But then again…they are in it for the money too. And I don’t think Jesus Christ will be here any time soon to handle the situation. You also seem to be a brand for “FOX NEWS” thinking that over 50% of Americans are takers. I think they and you are wrong….given the opportunity, most people would rather work to get by then take from the government. And lets face it….lately the rich have put millions of more Americans in poverty! And the “job creators” have had 12 years of tax breaks and yet…….no jobs! hummmmmm What world do you live in?

  32. Scott,
    Your most recent comment claims:

    you seem to be a person of many assumptions. my point wasn’t about the “redistribution” of wealth….it was on the taxing of wealth.

    Yet your previous comment said:

    It seems to me than that the 20% should pay 89% of the national tax.

    Whether you realize it or not, that is redistribution of wealth, because you want the 20% to pay 89% of the tax burden, and while some of that goes to fund things from which we all benefit (for exmaple, to fund the military which defends us all) a significant portion of that tax burden goes to pay for government programs that do not provide any benefit at all to that 20%, but rather redistribute that money to others.

    And the 2008 financial crisis was something that Republicans tried to prevent, while Democrats insisted that there weren’t any “safety and soundness issues” at Fannie & Freddie:

  33. You also seem to be a brand for “FOX NEWS” thinking that over 50% of Americans are takers. I think they and you are wrong…

    Go to http://www.irs.gov/file_source/pub/irs-soi/09in05tr.xls
    Open the file.
    Go to cell H206
    That cell shows that in 2009 (the most recent year for which such data is publicly available), the top 50% of returns (based on income size) paid 97.75% of the Total income tax.

    That means that the bottom 50% of returns (based on income size) paid only 2.25% of the Total income tax.

    So, it is absolutely true that 50% of Americans pay nearly 100% of the Income taxes, while the other 50% of Americans pay nearly no Income taxes, and many of those actually get paid money by the IRS in the form of “Earned Income Credit”.

    It’s not a stretch at all to say that 50% pay little to nothing to the IRS, or even get money from IRS.

    While the other 50% foots the bill.

  34. Scott Lago says:

    well…I certainly wasn’t getting into the issue of how the tax money was spent. That is YOUR assumption!!!! And yes…I do understand that tax dollars go to social programs……but they go to infrastructure upgrade as well as subsidies to business and farming. The point is I was talking about the fairness in the tax itself…and yes…I believe if they control 89% of our wealth..they should pay 89% of the tax…only fair. Afterall….the average raise in income since the 1970’s has been about 13%. Whereas, during that same period income rose about 300% for the top 1%. I have to think there is a problem there…..don’t you? Also you might want to read the book “Bailout”, by Neil Barofsky, who was the SIG for the TARP program. The problem didn’t begin with Freddie Mac or Fanny Mae! It began with the sub-sub-prime loans that were bundled into COD,s and other bonds issued by AIG, JPMorgan Chase and other large banks. The problem Freddie Mac and Fanny Mae had was that those same banks, AIG, JPMorgan…etc….had so much of their monies tied up into Freddie Mac and Fanny Mae!

    50% damn…that should be the top 20% paying 89%…how did the other 30% get screwed? Must have been the crony capitalist worming it’s way into the government. I don’t believe the problem is government……I believe it to be the crony capitalist. That is not to say I am anti capitalist……I’m just anti greed. They created the poverty problem and want the government to clean it up!

  35. Do you know who is really to blame for the sub-sub-prime loans? Research who passed, and then expanded, the Community Reinvestment Act. Then look who represented ACORN when they sued banks to force them to make more of those types of loans.

    that should be the top 20% paying 89%…

    You obviously didn’t look at the IRS spreasheet I directed you to previously. Go back to row 206 and look at the whole row:

    Item, tax year Total Descending cumulative percentiles
    Top
    0.1 percent
    Top
    1 percent
    Top
    5 percent
    Top
    10 percent
    Top
    25 percent
    Top
    50 percent
    (1) (2) (3) (4) (5) (6) (7)
    Total income tax share (percentage):
    2009 100.00 17.11 36.73 58.66 70.47 87.30 97.75

    The top 25% paid 87.3% of the total Income tax bill.
    The top 10% paid 70.5% of the total Income tax bill.
    And the top 5% paid 58.7% of the total Income tax bill.

    So, while half the country paid little to nothing in income taxes, or actually got paid by the IRS, the other half of the country paid almost all of the income taxes, and the top 5% paid over half the total bill.

    Even kids know that forced redistribution of assets is unfair and wrong:

  36. Scott Lago says:

    damn…..that doesn’t seem fair when it is the top 20% controlling 89% of the wealth….how did that other 5% get involved when the top 1% controls 42% of the non-home wealth……and the next 19% controls 53% of the wealth. And the top 1% is only paying 37% yet controls 42% of the wealth. If you had read the report I sent you you could see that when it comes to financial (non-home) wealth…the top 20% controls almost 96% of the wealth…and you and I both know that is wealth made in capital gains and they are paying what…..less the 15% on that amount. Yet those who are actually working in this country are paying 34% of their income! I see and know where you’re going with all of this…but the figures still just don’t add up! The top 20% have increased the povertly level in this country….they SHOULD have to pay for it too!

  37. Scott,
    I have a homework assignment for you. Please research and report back to me the % of our population living in poverty on (or as close as you can get to) the following dates:
    January 1, 1995
    January 1, 2007
    November 13, 2012 (Present-day)

  38. Scott Lago says:

    Hi Guy! as requested, here are the results of some quick research (I added 2009 because that was the year following the 2008 “bubble burst”:

    Number %
    1995- 36.4 million 13.8

    2007- 37.3 million 12.5

    2009- 44 million 14.3

    2012- 46.2 million 15.0

    as you can see that there has been an increase of almost 10 million between 2007 (before “bubble burst”) and 2012 (today). Personally, I believe that 10 million is a result of corporate greed. Just so you know, I agree with you that less government is better…..but I can not support “no government”! I know many blame the Clinton adminstration for “deregulation”….but isn’t that what we want, less government. The problem occurs when there are people without conscience taking advantage of no oversite and abusing their “powerful” positions. Although I think they will self regulate for awhile….there will always….always….always be someone to come along and abuse that freedo; and that is usually at the expense of the poorer of us. The question that keeps spinning around in my head is how do we protect “outselves” from corporate wolves? Now that union membership is less then half of what is was in the 1970’s (25% of American workers were union members- today that number is 12.5%), who protects the American worker?

    I am not anti “rich”. I do believe in the American dream. But I find it difficult to support the “take the money and run” mentality that seems to the “capitalist” premise. Now I don’t use that phrase lightly and wished I didn’t have to use it at all. But history has shown that the man at the top has no…no…no concern for those people working hard to enable him to be wealthy. Vanderbelt, Carrnage, and JP Morgan were making money that in todays market would be in the 10’s of billions of dollars and yet their workers were getting paid a dollar….that’s right…..$1.00 a day. Most of the workers were still living in poverty and they worked them 6 days a week at 12 hour days. The unions helped to make the middle class. By unionizing hard working Americans were paid “living” wages and given benefits. But since the 1970’s that is no longer the case. Almost all workers have been forced into acception pay cuts….and some of those up to 50% and made to “pay” into those benefits historically “paid” to them by the corportation. Now you might think that is good for business…..but even in the 1970’s American corporations were still making 100s of millions in profits.

    Just last night I hear that an owner of a West Virginia coal mine fired workers. He blamed it on the Obama reelection, when in fact, since the avent of shell natural gas fracking….the need for coal has decrease measurably. My question for this “capitalist” is, knowing that the need for his coal would decrease with the rise in natural gas production, why didn’t he set up some fund or policy to “retrain” his workers to take advantage of the shift in resource need? I can only say it is because he really doesn’t care. He is still a very wealthy man…and although he isn’t making the money he used to make….he will die far, far, far more wealthy then those poor guys he so easily dismissed. Another example is the owner of Papa John’s pizza. He has stated that he will have to cut back on working hours of his empoyees because “Obamacare” will take an additional $3 million to cover his employees. Now why does he need to do that? His company makes over a billion dollars annually. What is 3 million to protect his worker and their familys to him? Money…of course. His personal worth is in the 100’s of millions….and 3 million will “hurt” him?

    Finally, since the 1970’s, personal incomes of the average americans have increased by about 13% whereas, though the same period of time personal income for those in the tip 1% has increased by almost 300%. Doesn’t that make you wonder? Does that seem fair at all? Adam Smith, the writer of Wealth of Nations, states:(paraphrased) that for capitalism to work, those that benefit the most from the society must put back into that society. Today they are resoursing that money out to China, Mexico….etc.

  39. Scott,

    Please provide the URL link to the data. Do those numbers represent the begining of the year? (I’ll assume for now that they do.)

    I think that over a period of time, it’s fair to attribute the majority of credit and/or blame to the party which controlled a majority of Washington, D.C during that time.

    On January 3, 1995, the balance of power shifted from majority Democrat to majority Republican when Republicans took majority control of the House and Senate. Republicans held majority control (2+ out of 3 of the House, Senate, and Presidency) for the next 12 years, and the balance of power shifted back from majority Republican to majority Democrat when Democrats took majority control of the House and Senate on January 3, 2007.

    Republicans held majority control for 12 continuous years from January 3, 1995 to January 3, 2007, and Democrats have now held majority control for nearly 6 years (from January 3, 2007 to present), and are guaranteed to have majority control for at least another 2 years (until January 3, 2015, at least). It would take Republicans winning both the House and Senate in the 2014 elections in order to tip the balance of power back to Republicans on January 3, 2015.

    Using the numbers you provided, during the 12 continuous years of Republican majority control, poverty decreased from 13.8% to 12.5% … a drop of 1.3 points.

    And, again using the numbers you provided, during the last nearly 6 continuous years of Democrat majority control, poverty increased from 12.5% to 15.0% … an increase of 2.5 points. (And things are looking worse, not better, looking forward from here.)

    I place the majority of blame for what happened in 2008 on those who pushed the Community Reinvestment Act, sued banks to force them to make more sub-prime loans to risky applicants, and resisted attempts to reform Fannie and Freddie.

    The problem isn’t Capitalism. The problem is unethical behavior. Our Founders knew that premise of limited Government absolutely requires that our society as a whole have a moral foundation and that people would self-govern their activities according to that moral foundation.

    [W]e have no government armed with power capable of contending with human passions unbridled by morality and religion. . . . Our constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.

    (Source: John Adams, The Works of John Adams, Second President of the United States, Charles Francis Adams, editor (Boston: Little, Brown, and Co. 1854), Vol. IX, p. 229, October 11, 1798.)

    To the kindly influence of Christianity we owe that degree of civil freedom, and political and social happiness which mankind now enjoys. . . . Whenever the pillars of Christianity shall be overthrown, our present republican forms of government, and all blessings which flow from them, must fall with them.

    (Source: Jedidiah Morse, A Sermon, Exhibiting the Present Dangers and Consequent Duties of the Citizens of the United States of America (Hartford: Hudson and Goodwin, 1799), p. 9.)

    Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports. In vain would that man claim the tribute of patriotism who should labor to subvert these great pillars of human happiness, these firmest props of the duties of man and citizens. The mere politician, equally with the pious man, ought to respect and to cherish them. A volume could not trace all their connexions with private and public felicity. Let it simply be asked, Where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths, which are the instruments of investigation in Courts of Justice?

    And let us with caution indulge the supposition that morality can be maintained without religion. Whatever may be conceded to the influence of refined education on minds of peculiar structure, reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle. It is substantially true, that virtue or morality is a necessary spring of popular government. The rule, indeed, extends with more or less force to every species of free government. Who, that is a sincere friend to it, can look with indifference upon attempts to shake the foundation of the fabric?

    (Source: George Washington, Address of George Washington, President of the United States . . . Preparatory to His Declination (Baltimore: George and Henry S. Keatinge), pp. 22-23. In his Farewell Address to the United States in 1796.)

  40. Scott Lago says:

    I agree with you on your thoughts about capitalism. Which is why I stressed “crony capitalism” and not just capitalism. But the history in this country shows that when there are no limits….they feel “entitled” to take all they can at the expense of those working to provide them with their income. And as far as the government is concerned…I conceed that the government is part of the problem….but largely because of the “crony capitalist” that push for and get the legislation that serves themselves. It doesn’t matter who is in power! When Regan was in power the poverty level was at 15% too! He is also the man that busted the Airtraffic Controllers union under the pretext of “National Security”. Since then unionized works have taken hit after hit….pay cuts..jobs shipped overseas…..and that is a result of both government and corporations. Now you may want to place the blame on the government…….I feel they are only part of the problem. And lets face it…..corporate American has NEVER>>>NEVER>>>EVER taken responsibility for their “participation”. They blame the government! I’m sorry itooktheredpill, but when the Secretary of the Treasury comes from Goldmen Sacks…or JP Morgan Chase..etc…, I don’t feel as if THEY are interested in the average American. Their interests are on Wall Street! And if you look at the history…….These are the men who have controlled the Treasury under both parties!

  41. Scott,
    You and I are both against “crony capitalism”. I don’t see the government or unions being the answer to that (and if you investigate where TARP money went, you’ll find that Billions went to unions and to giving unions “crony” benefits from Washington, D.C.

    I see the answer being a return to the spiritual foundation that made this country great in the first place. I see a more moral populace voting for more moral representatives in our government, and expecting higher levels of morality and ethics from those in the business community. I see the technology of today leading to “forced” transparency, where wrong doing can no longer be kept secret. I see sunlight being a great disinfectant.

    “when the Secretary of the Treasury comes from Goldmen Sacks…” I was once offered a job at Goldman Sachs, and I thank God that I did not take that job. I completely agree with you that there is a big problem with the power and influence that Goldman Sachs and it’s alumni have in government at both the Federal and State level (think Jon Corzine). I think that Henry Paulson was a Trojan Horse, and George W. Bush made huge mistakes in both a) nominating, and b) taking the advice of, Hank Paulson. Paulson pushed a “Doomsday” story and insisted that TARP was necessary in order to save our country from financial ruin. I call B.S. on that, and Bush was unwise to follow Paulson’s plan. TARP is part of the problem, not part of the solution. TARP added to the FY 2008 and FY 2009 budget deficits so much that beginning in FY 2009, deficits over $1 Trillion have become “the new normal”.

    We need wisdom, honesty, integrity, and fiscal discipline in Washington, D.C.

    —-

    I would caution you from thinking that unions are the answer. Union leadership today is the face of the modern Communist Party USA. I’ve written about that over various posts, but for now, start with this one.

  42. Scott Lago says:

    actually I have the book on the distribution of TARP money…and NONE>>>NONE of it went to the unions. And I don’t think a “moral” foundation is necessarily the way either. John D. Rockefeller was a very religious man yet paid his workers $1.00 a day for 6 day work weeks at 12 hours a day. Most all of these workers remained in poverty! And from what I understand….religion and capitalism are diametericly opposed in philosophy!

  43. General Motors repayed its TARP loan from the Treasury with other TARP money, so yes, TARP money went to GM and funding union pensions.

    So, the money may not have gone directly into union bank accounts, but TARP money absolutely was used to provide benefits to Union cronies.

    A dollar was worth a whole lot more in John D. Rockefeller’s time than it is today. And his workers were not slaves… they were free to leave their job with him and go work elsewhere. Free market.

    And from what I understand….religion and capitalism are diametericly opposed in philosophy!

    So, you’ve bought into Marxist “liberation theology”? Please explain your understanding of how the Bible is supposedly “diametericly opposed” to capitalism.

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