Big Dog

Now this is what I call a dog.

Understanding Taxes

Understanding Tax

Sometimes Politicians can exclaim; "It's just a tax cut for the rich!", and it is just accepted to be fact. But what does that really mean?

Just in case you are not completely clear on this issue, we hope the following will help.

Tax Cuts - A Simple Lesson In Economics

This is how the cookie crumbles. Please read it carefully.

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.
The tenth man (the richest) would pay $59.

So, 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.

"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. 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 each 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.

And so:



The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now paid $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 $49 instead of $59 (16% savings).

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. 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 me!"

"That's true!!" shouted the seventh man. "Why should he get $10 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 the tenth man 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 something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, 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 at the table anymore. There are lots of good restaurants in Europe and the Caribbean.

Understanding Tax part 2

Here are some other considerations about our tax system.

The tenth man for example has direct access to the restaurant owner and gets to decide what's on the menu. The restaurant also buys it's supplies from the tenth man at 5 times the normal price.

Not only do the first four men eat for free but they get free parking and a coupon for a free dessert at another restaurant. The first four men also get more coupons the more guests they bring with them. (their guests eat for free too) two of the first four men aren't even members of the restaurant but the restaurant is forced to give them free parking and spa privileges too.

The prices at the restaurant are also higher than they need to be because the restaurant owner is always giving money to his competitors to make their food more affordable to their (the competitors) customers.

I could go on but I won't.

How Small We Really Are.

As of 2007, the world population reached 6.6 billion

It is estimated that the Milky Way Galaxy, the galaxy where Earth resides, contain 200 billion stars but this number might reach 400 billion


An estimated 50 billion galaxies are visible with modern telescopes and the total number in the universe must surely exceed this number by a huge factor, but we will be conservative and simply double it. That's 100,000,000,000 galaxies in the universe.
The number of stars in an average galaxy. As many as hundreds of billions in each galaxy.
Lets call it just 100 billion.
That's 100,000,000,000 stars per galaxy.

The number of stars in the universe.
So the total number of stars in the universe is roughly 100 billion x 100 billion.
That's 10,000,000,000,000,000,000,000 stars, 10 thousand, billion, billion. Properly known as 10 sextillion. And that's a very conservative estimate.

The number of stars that have planetary systems. The original extra-solar system planet hunting technology dictated that a star needed to be to close to us for a planet to be detected, usually by the stars 'wobble'. Better technology that allows us to measure the dimming of a stars brightness when a planet crosses its disk has now revolutionised planet hunting and new planets are being discovered at an ever increasing rate. So far (August 2003) around 100 have been discovered so we have very little data to work on for this estimate. Even so, most cosmologists believe that planetary formation around a star is quite common place. For the sake of argument let us say it's not and rate it at only one in a million and only one planet in each system, as we want a conservative estimate, not an exaggerated one. That calculation results in:
10,000,000,000,000,000 planets in the universe. Ten million, billion, as a conservative estimate.

The number planets capable of supporting life. Let's assume that this is very rare among planets and rate it at only one in a million. Simple division results in:
10,000,000,000 planets in the universe capable of producing life. Ten billion!

For another approach I recommend The Drake Equation. This states that the number of communicating civilisations in our galaxy (note, our Galaxy only, not the universe) likely depends on a number of factors which must combine to yield a habitable planet where life has the chance to develop to a certain level of technological know-how. These factors include the rate of formation of stars like the Sun, the fraction of those with planets, the fraction of Earth- like planets, the fraction of such planets where life develops, the fraction of those where life becomes intelligent, the fraction of intelligent species who can communicate in a way we could detect, and the lifetime of the communicating civilisations. As you may imagine, There is a lot of debate about reasonable values for most of these factors.
Frank Drake's own estimate puts the number of communicating civilisations in just our Galaxy alone at 10,000.
Even though the figures I have used cannot of course be considered to be accurate, at least the figure of 10 sextillion stars in the universe is most definitely an underestimate. The number of life supporting planets that may be orbiting those stars is impossible to say, but by any reasonable estimate must surely run into the millions, if not billions. This is easy to justify on the basis that following the Big Bang the most abundant material in the universe was hydrogen and helium, being the most simple atoms, and this material forms the bulk of the raw ingredients for star formation. All stars begin life in the same manner, by the gravitational drawing together of these basic elements that then gravitationally collapse to form a star. Apart from size, all stars begin pretty much the same, with the remnants of the hydrogen and helium clouds that are not absorbed into the stars forming an orbiting disc that goes on to form the protoplanets. With this same process repeated many billions of times it would be only statistically reasonable to expect that many planets would have similar characteristics, and would be capable of supporting life of one form or another, just as our planet does.

So even if we only count the number of stars which would be far less than the number of planets and each of us is but 1 of nearly 7 billion people on just one of those planets. It kind of makes you feel little doesn't it?! smaller than a grain of sand on a beach or a drop of water in the ocean.

Remember that next time you start feeling self absorbed.