Sep 14 2008

How Taxes Work

Category: taxesharmonicminer @ 9:04 am

This is an oldy, one whose authorship is still in doubt, but whose truth is unquestionable.  It’s a classic, and if it doesn’t help you understand the nature of progressive taxation, nothing will.

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.

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