What Is My “Fair Share”?

I try not to post political comments . . . but much of this is about leadership, management and so often, failure.

In all of the discussions about our economy, we continue model for adult daughters and their husbands . . . that it takes work to get ahead . . . and work is not easy . . . that’s why they call it WORK!

A friend of mine found this brief summary of “how our tax system works”.  It has prompted some good discussion . . . read and evaluate! 

Suppose that every day, ten friends go out for breakfast 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 friends (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 friend (the richest) would pay $59.

So, that’s what they decided to do. The ten friends ate 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 breakfast by $20. Food 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 friends were unaffected. They would still eat for free. 

But what about the other six . . . 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 friend and the sixth friend would each end up being paid to eat their breakfast.  So, the restaurant owner suggested that it would be fair to reduce each friend’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay

And so:

  • The fifth friend, like the first four, now paid nothing (100% savings).
  • The sixth now paid $2 instead of $3 (33%savings).
  • The seventh now pay $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 (16% savings and he paid the extra dollar).

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the friends began to compare their savings.

“I only got a dollar out of the $20, “declared the sixth friend. He pointed to the tenth friend,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth friend. “I only saved a dollar, too. It’s unfair that he got ten times more than me!”

“That’s true!!” shouted the seventh friend. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four friends in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine friends surrounded the tenth and began to ridicule him for having wealth, success and money.

The next morning the tenth friend didn’t show up for breakfast, so the nine sat down and ate without them. 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, in a very simple illustration, 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 eating overseas where the atmosphere is somewhat friendlier.

I don’t mind paying my share . . . I don’t mind helping those who are not as fortunate and blessed as we have been . . . I don’t mind sharing with those in need . . . but fair and equal mean two different things!

Equal is based on sharing . . . it divides wealth by participants attending!  Fair is based on stewardship . . . it divides wealth by proven ability!

My name is Bob Miller and I approve this blog!

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