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Thursday, September 23, 2010
Here's a different lesson on taxation: A reply to a reply

BELOW IS A LETTER TO THE EDITOR of the Chapel Hill Herald written by North Carolina State Senator Eleanor Kinnaird in reply to the column above: "Dinner for Ten: A Parable of Tax Cuts."  It is a classic liberal response:  all heart and no head.  Although Ellie is as sweet as can be, her malign characterization of how the wealthy diners in her parable became wealthy makes me want to beat them up too.  Any chance any of the wealthy got there by making good personal decisions, studying diligently, working hard, investing their resources well or taking prudent risks on good business ideas, all of which benefited not just them and their families but their communities and their countries as well?  Didn't think so.  (And as for the primary point of the column, that if you cut taxes it will be the people who pay taxes who will get their money back, is there any reason that there are no observations on that point?)


The Letter:  Here's a different lesson on taxation

Gary Gaddy in his column posits a tax lesson using an example of 10 friends who go to dinner together weekly and split the bill in increasingly uneven ways. Those who end up paying the least push the balance onto the unlucky few, who, as a result, abandon the dinner altogether and find restaurants in Monaco and the Caribbean and presumably another group willing to split the bill evenly.

I will posit a different set of friends going to dinner together. Two are hedge fund managers who specialized in collecting mortgages lent to poor people who didn't understand the devastating terms of the loans. Two are industrialists who closed their U.S. plants and moved them off shore where they can pay low wages and ignore safety and environmental standards. Two are factory workers who lost their jobs when the factories closed. Two are single women whose husbands took off and left them with children to raise by themselves. Two work for fast-food restaurants at minimum wages.

In the beginning, they can all split the bill evenly. But after a while, the factory workers run out of unemployment payments, those with the balloon payments on their mortgages are losing their homes to foreclosure, the single women no longer get support payments and the fast-food workers' cars blow up, leaving them without a way to get to work. (There is no transit in their town.)

In the meantime, the hedge fund managers get $10 million bonuses, the industrialists buy homes in Monaco and the Caribbean, and all four stop going to church, where they are commanded to take care of the poor and love their neighbors as themselves.

Eleanor Kinnaird

This letter to the editor was published in the Chapel Hill Herald on Wednesday September 29, 2010 

Authored by Gary G. Gaddy at 9:20 AM EDT
Updated: Wednesday, September 29, 2010 10:44 AM EDT
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