A Taxing Parable

David Shagoury published in The Bulletin Newspapers, May 31, 2001

I have substantially revised and amended the following parable, which has been circulating about via the internet from an unknown original source, to provide a simple and I hope a helpful illustration for readers regarding the “fairness” aspect of the tax cut debate in Washington.

Every night, 10 men met at a restaurant for dinner.  At the end of the meal, the bill would arrive.  They were charged $100 for the food that they shared.  Every night they lined up in the same order at the cash register.  The first four men paid nothing at all.  The fifth paid $1.  The sixth man paid $3.  The next three men paid $7, $20 and $25, respectively.  The last man was required to pay the remaining balance of $44.  The 10 men were in a routine when the restaurant provided them with a significant discount.  Since the cost to present the dinner was actually about $70, it announced that it was cutting down its prices:  Now it would charge only $80 for dinner for the 10 men.  This reduction wouldn’t affect the first four men- they would continue to eat at no cost.  The fifth person now had his one dollar charge eliminated, and the sixth man’s contribution dropped from $3 to $2.  The seventh, eighth and ninth men had proportionally higher dollars saving, and last man was left with a bill of $38.  Outside of the restaurant, the men compare their saving when angry outbursts began to erupt, not from any of the men themselves, but from those who were purporting to represent the diners.  Hey, they yelled, “the 6th man only got $1 out of the total reduction of $20, and he”-pointing to last man “got $6.”  Then they assailed the new reductions by citing that the fifth man only got $1 in saving too.  They howled that it is unfair that the last man received six times more than him.  Finally, these purported representatives screeched in indignant fury because the first four men, who did not pay any of the bill at all, obviously received no dollar reduction and therefore didn’t realize a savings, and so the purported representatives declared the discount unfair and opposed it.

As an aside, these representatives didn’t seem to ask what the diners might be able to afford collectively with the extra $20!

This parable, like the tax plan it is intended to support, is certainly not perfect, but its lesson is beneficial and quite relevant to the continual liberal rant against the Bush tax cut that has passed.  The tax cut modestly and over an extended period of years reduces the rate of taxation on the income of those who pay the vast majority of taxes.  Also, the greatest percentage of tax relief goes to the lower in come earners as the aforementioned parable denotes.  Another grossly ignored fact is that the approximately $1.4 trillion in savings the Bush plan provides to the taxpayers of America over a 10 year period (let’s please agree now to stop referring to a tax cut as a government cost:  an increasingly lazy heresy that our governing class lapses into far too carelessly, but sadly to purposeful effect), is not only humble in comparison to our economy’s GDP, but is also eclipsed by what the American people will be asked to pay in direct transfer/ welfare payments (e.g. AFDC, Medicaid, food stamps etc.) during the same time period.

It is my hope and belief that President Bush will become progressively more pointed in characterizing the moral distinction between enhancing the freedom and independence of the people, and inciting the envy and resentment from the people.  Today there are too many people who are NOT rich, but who are being forced to have their behavior excessively governed by an overly complex and punitive tax code that hi defended by liberals who seem dedicated to enhancing their own self-image as an enlightened elite on the backs of many Americans who are striving to improve the lot of their families.  Now, as in the eighties, it is time to again reaffirm our nation’s endemic and sacred association with upward mobility; not punish its pursuit.

This new tax cut provided by the steadfast leadership of President Bush will be of meaningful benefit on income taxpayers across the spectrum.  Yet it must also be an initial phase in bringing further relief to working Americans who, without being members of the wealthy elite, will still be spending too much of their money in taxation, and too much of their time conforming to our 9,500 page tax code!