As a tax accountant, I find that it is time again to start thinking about filing income tax returns. As is our wont, tax accountants, with a little dark humor, enjoy tax-related jokes and stories. I’m no exception to this quaint rule of thumb.
While perusing Facebook the other day, I came across a cheery little story that has a ring of truth to it. In a novel way, it explains the U.S. income tax system rather vividly by employing the use of a commodity: beer.
Rather than sit here and bore you, dear readers, with paragraphs explaining lines and columns of tax schedules and forms, I find myself wanting to share this story with you. It is a story about the tax system, based on beer, I found this on another blog. I hope you enjoy it as much as I did and, for some of you (you know who you are), I hope that a lesson might be learned.
The Tax System Explained in Beer
By admin | Published: January 12, 2012
www.mrconservative.comSuppose that every day, ten men go out for a 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.
Read the rest of this story by clicking here.
With all due respect Paul. What a load of crap. Spoken like a true conservative. People hire tax accountants to avoid such pitfalls. As a person of means at times in my life I can assure you I have paid way under what a traditional 9 to 5 working stiff pays on a percentage basis. I agree completely with Buffett and the wealthy should be paying more and the middle class should be getting more breaks and more benefits. I am revolted by the Conservative movement and their tax policies. Stop getting us into stupid wars and maybe I could give them some slack but in all honestly they have massively screwed up the USA and the financial consequences for my children wil be dire. Don’t get me started LOL
Hi Joseph – There’s nothing stopping persons of means from voluntarily paying more than they owe into the US Treasury. There’s even a tax form for that.
Trouble is, though, no one seems to use it, only talk about it. I say, “Pony up, Mr. Buffett.” Start by having Berkshire Hathaway pay the $1 Billion in back taxes it owes. Then, instead of paying capital gains rates, pay ordinary rates voluntarily. Finally, if you feel bad that your secretary’s tax rates are higher than yours, then pay her taxes, too.
Just remember: According to latest IRS data, 86% of all federal income taxes are paid by the top 25% of income earners. The rich do pay taxes!
(btw, the last conservative president was Ronald Reagan. No “never-ending” wars on his watch. At any rate, Congress has the power to make war and you can’t say that it was ever conservative in the past 50 years.)
Have a prosperous day 🙂
The liberals kill me. 40% of US citizens pay ZERO income tax, if all Americans are created equal how is this possibly justified. A flat tax would be so much fairer and easier to understand though it might make tax accountants unhappy, at least the ones not already semi retired.
Hi Tony – That 40% includes recipients of the refundable Earned Income Credit (EIC) who not only do not pay any income tax but do receive a refund.
A flat tax may be a good goal, but you have to get rid of the present tax code first. The government has a nasty habit of not getting rid of old taxes.
An example was the federal excise tax on telephones. It was finally revoked about ten years ago. Trouble was that it was put in place to finance the Spanish-American War at a time when only the very rich had telephones.
Even though that tax was abolished, a new federal tax on telephones was put into place to finance putting the internet into all schools. So the name was changed and its purpose modified, but that darn tax keeps on living.
Imagine winning a flat tax, then finding out that the old income tax was still on the books. Talk about making tax accountants happy! 😉
That would be only one Redhorse beer for each person at the Grand Hyatt here on Kauai. Why they serve Redhorse is beyond me, but I like the analogy. I guess you will be busy soon since tax season is looming.
Hi Jay – They must not be able to get SMB! 😉
Tax season is here & I’m busy already. It seems to come earlier and earlier each year!
Paul,
Google Chuck Woolery, game show host. He makes your point on taxing the rich. Good humor. He also has the answers to solving the debt crisis. I’d like to see him in on the debates.
Hi Robert – Yes, Chuck Woolery certainly makes the point! 😉
Of course, all wealth could be transferred to the federal government but it would only sustain the budget for six months. What is truly needed is a reduction in spending.
I completely agree Paul. Cut spending! We all have to live within our means and government should be no different.
Hi Robert – Cut up the federal credit card. If the government was on “cash accounting” (like individual taxpayers are) instead of “accrual accounting,” there would be more thought about the budget and not spending. 😉
This year I have decided to wait and see if the war in Iran starts. I will be paying my taxes until war starts.
Whenever they start the war with Iran, that is it. No more paying taxes for me.
They will be no longer using my tax money for wars. Period!
Hi Bob – Well, they use tax dollars to help other countries (like The Philippines) with natural disasters, too. After all, that’s where my tax pennies go. 😉
Paul,
Read that article and had a great luagh. Sees the more they get for free the more greedier they get. I don’t understand EIC you pay nothing in taxes but you get a large refund. If that’s not an insentive for staying poor. Every year I owe money to the IRS why don’t I just wrie a check to the poor lady down the street she’s getting it anyway. EIC is the stupidiest thing around.
By the way when I move to the Philippines all I have to pay is for my pensions right?
How’s the Bungalo got electric yet?
Hi Bruce – EIC was originally an incentive for unemployed poor with children to join the work force. They broadened the requirements for it and now it’s lost the original effect.
As to the bahay kubo – awan kuriente (no power, yet). 😉
Paul,
I’m I correct that if all I have is my pensions and social security from the asawa that all I must pay in taxes? I’m from Fl so not income tax there.
Hi Bruce – You’ll pay federal income tax on your pension income and, depending on how much pension income you receive, possibly pay federal income tax on some of the Social Security benefits.
Don’t forget any interest and/or dividend income – that’s taxable, too. (Income from all sources worldwide are subject to US federal income tax.)
🙁