TAXES: Who's really paying?

This is a vastly oversimplified description with regard to detail but the point made is valid.

Sam Schlabodnick decided to go into business for himself making hats. He calculated that it cost 50 cents to make a hat and he needed to make 50 cents profit on each hat to make a living so he sells his hats for $1.

Then one day an IRS man comes and tells him that he must now pay a tax of 10 cents to the government for each hat. Now each hat costs Sam 60 cents to make but he still needs to make 50 cents profit on each one. So now Sam sells his hats for $1.10. An interesting question is: Who's paying the 10-cent tax?

In the meantime, government officials are laughing hysterically at how they conned everyone. They turned business owners into tax collectors with no salary (to say nothing about the extra expenses involved) and they fooled the public into thinking they were taxing businesses and not the public. Two birds with one stone. No one ever caught on. (Actually I believe Ronald Reagan did. He once said businesses should not pay any tax but he was probably quickly shushed by his advisers telling him it would cost him votes to say such things. It is very easy to brainwash the public but next to impossible to un-brainwash them.)

PHIL MEMBURY

Coeur d'Alene