Tax Plans

This is a VERY simple way to understand the tax laws. 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; and the tenth man, the richest, would pay $59.

That's what they decided to do. 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 (in tax language a tax cut).

"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 $80.00.

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 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.

So the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12; leaving the tenth man with a bill of $52 instead of his earlier $59.

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, but he, pointing to the tenth. "But he got $7!" "Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too. It's unfair that he got seven times more than me!" That's true!" shouted the seventh man, why should he get $7 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 he 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, a little late what was very important.

They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!

And that, boys and girls, journalists and college instructors, is how the 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 at the table anymore.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!

T. Davies Professor of Accounting & Chair, Division of Accounting and
Business Law
the University of South Dakota

Happy Birthday Jo Ann

Well…my sister celebrated a milestone of a birthday yesterday. I won’t say which one but she is an old coot now. I have included a couple of recent pictures of her at her part time job at a Hallmark store. The one picture is also of her good friend Marie who she flew with for many years at Delta Airlines. The picture with the flowers is from a pilot that she flew with many times over the years. (Click picture for larger view) I am looking forward to next month when we move her up to Michigan. I sure hope this winter is not too bad. As a Southern girl, she is used to easy winters with a few chilly days. We live in an area that has “Lake Effect” snow. It blows in off of Lake Michigan and dumps the snow on our area. Happy Birthday Sister.

Labor Day Weekend

We had an enjoyable Labor Day weekend and the weather was perfect. Saturday, we drove 100 miles to Barlow Lake to visit my cousins. Uncle Hugo had a cottage at the lake for as long as I can remember and we spent many a summer day out at the lake. Now the kids have the cottage and they spend many of their summers there. I think Cousin Vincent is about four years older then me and Georgia is probably two years older. We have not seen them for many years so I just had to go to the lake to visit. Labor Day is the weekend that they bring in the boats and dock to store away for the winter.

Vince’s wife is Suzy and their son (Erik) and daughter-in-law were at the lake. In addition, Georgia’s husband Steve and their daughter and granddaughter (Samantha) were at the lake. Here is another case of my not remembering names. I should know their names but forget names so easily. I somehow missed getting a picture of Samantha.

The first picture is of Georgia, her daughter, Erik, Erik’s wife, and then Suzy. The next picture is of Erik, Erik’s wife, Suzy and then Steve (Georgia’s husband). The third picture is Suzy, Erik, Georgia’s daughter, and Erik’s wife. The fourth picture is of Steve and Vince (he graduated from Michigan). The last picture is of Joanne and me on the swing that has been part of the cottage for as long as I can remember. I was just as if I had never been away. (You can click on the pictures for a larger view.)

On Labor Day, the kids and grandkids took us out to dinner for our Anniversary. It was a fun time with the kids and little ones both at the restaurant and out on their patio at home.

An Evening With The Kids

My daughter-in-law did not want her picture taken because she said it would just end up on my blog. Guess I will have to post her picture here just for the fun of it. Kelly and her daughter, Lauren, were playing a game and that is why their arms are raised. I have included another picture of just Kelly and one of Nana, Mike and Josh.

Happy Birthday Josh

Happy 13^th birthday Joshua. You are now a teenager. Our grandson turns 13 today so that is a big deal. It means we are really getting old to have a teenage grandson. The kids get to pick their restaurant of choice on their birthday so we will be celebrating at Chili’s this evening. The first picture if of Josh and the second picture is of Nana and the Grandkids (click picture for larger view). Actually, this took place yesterday but we spent a lovely evening at the kid’s house talking and watching the grandkids swim.

Update on the hip. It is still healing but very slowly and I still cannot put the anti-embolism stocking on by myself. I need to continue to use that stocking to keep the edema down.

I will miss Group this week because we are going on a trip for a few days. We will be camping in Birch Run and visiting the outlet mall there and go into Frankenmuth. It is a quaint little town with a very German atmosphere.

County Fair

It is County Fair time in our little town. The fair is actually the Berrien County Youth Fair and really draws a crowd. We go for the junk food and to watch the people. It is great people watching in this area. I think we must be too close to the nuclear plant because the county has some strange people living here.

For lunch, we had “walking tacos” and for dinner, we had sirloin tips with potatoes and mushrooms. For dessert, we had ice cream cones. Nothing like fair food while watching the kids rides around on their horses getting ready for shows. We really enjoy the sights and sounds of the fair. We have a weeks pass for both of us so we will probably be having lunch and dinner there all week. Everyday, we will probably try different foods and pick different spots for people watching.

Prior to going to the fair is a double Xanex but I got through it okay. We missed on Monday because I just could not get ready mentally. I should be okay for the rest of the week now that I have made it through one day. Tomorrow will more horse watching and we always have to check out the Llamas. They are such a strange looking animal but always have a happy look on their face. A little rain is predicted for tomorrow but I hope it holds off until the evening and after the events.

Safe Zone

Guess it has been a while since my last post. It is difficult to sit down and write out what is happening when PTSD keeps you from doing many things. Just getting me out of the house is a problem and I have all kinds of excuses why I do not want to go somewhere. My wife is good at getting me mobile but it is a struggle. Veterans with PTSD need to stay within their safe zones and we avoid crowds at all cost. As one member said today, he needs to be warned ahead of time (like a day or two) if the wife wants to go somewhere. We have difficulty just spontaneously going somewhere. We need to get our minds ready to leave the safe zone.

Well…we are going camping this weekend and I have had a couple of weeks to get my mind prepared. It is a short trip to Amish country to relax and take in the sights and sounds. It is fun listening to the “clop clop” of the horses all over town. There are some nice antique shops and a great hardware store in town. Going to that hardware store is the most fun of the whole trip. This store has anything and everything you can imagine.

Health wise, the hip is slowing getting better but not fast enough for me. With PTSD, I have little or no patience and that seems to be common with others in our group. I want to be walking normally again and that is not happening the way I envisioned. We did camp at Little River Casino in Manistee, Michigan a couple of weeks ago and Joanne had a great time. She loves to play video poker so she got three days worth of it. I did gain ten pounds at the buffets in the three days but luckily lost it in two days. I lost the weight about as fast as I lost money at the slot machines.