In the following article, Bruce Wilson compares John McCain's current and past election campaigns in the nomination process and what will be the general election, to Bob Dole's, 12 and 16 years ago.
Albert Einstein once said that insanity is doing the same thing over and over again, expecting different results. With that in mind, if John McCain wins the Republican presidential nomination, it might be appropriate to temporarily designate the site of the 2008 Republican convention an insane asylum. [1]
Why?
Here's why.
Saturday, February 2, 2008
How Taxes Work
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. 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 would pay $2 instead of $3 (33% savings).
*The seventh would pay $5 instead of $7 (28% savings).
*The eighth would pay $9 instead of $12 (25% savings).
*The ninth would pay $14 instead of $18 (22% savings).
*The tenth man (the richest) would pay $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!"
"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 for the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
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.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia
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For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
*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. 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 would pay $2 instead of $3 (33% savings).
*The seventh would pay $5 instead of $7 (28% savings).
*The eighth would pay $9 instead of $12 (25% savings).
*The ninth would pay $14 instead of $18 (22% savings).
*The tenth man (the richest) would pay $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!"
"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 for the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
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.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia
-------------------------------------------------------------------------------------------------
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Our Social Security
Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:
1.) That participation in the Program would be completely voluntary,
2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,
3.) That the money the participants elected to put into the program would be deductible from their income for tax purposes each year,
4.) That the money the participants put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other government program and,
5.) That the annuity payments to the retirees would never be taxed as income.
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Q: Which political party took Social Security from the independent "Trust Fund" and put it into the General Fund, so that Congress could spend it?
A: It was Lyndon Johnson and the Democratically controlled House and Senate.
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Q: Which political party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
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Q: Which political party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the United States.
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Q: Which political party decided to start giving annuity payments to immigrants?
A: Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments. The Democratic Party gave these payments to them, even though they never paid a dime into it!
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CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!
1.) That participation in the Program would be completely voluntary,
2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,
3.) That the money the participants elected to put into the program would be deductible from their income for tax purposes each year,
4.) That the money the participants put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other government program and,
5.) That the annuity payments to the retirees would never be taxed as income.
-------------------------------------------------------------------------------------------------
Q: Which political party took Social Security from the independent "Trust Fund" and put it into the General Fund, so that Congress could spend it?
A: It was Lyndon Johnson and the Democratically controlled House and Senate.
-------------------------------------------------------------------------------------------------
Q: Which political party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
-------------------------------------------------------------------------------------------------
Q: Which political party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the United States.
-------------------------------------------------------------------------------------------------
Q: Which political party decided to start giving annuity payments to immigrants?
A: Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments. The Democratic Party gave these payments to them, even though they never paid a dime into it!
-------------------------------------------------------------------------------------------------
CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!
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