The word “fair” has been bandied about a lot in politics lately. We are hearing about the likely return of the “Fairness Doctrine”; President-elect Obama likes to talk about tax “fairness” for the middle class; and of course we have the “Fair Tax” proposal championed by Neal Boortz, Congressman Linder and Senator Chambliss among others. I find it unfortunate that Boortz and Linder chose to call their proposal the “Fair Tax” because fair is a word that is mostly used in a way that only Orwell could love.

The reason the word fair is so hard to pin down is that its meaning is so dependent on the world view of the person using it. For president-elect Obama and the Democrats, fairness is apparently defined in terms of equality of outcome rather than equality of opportunity. They also seem to define it more from a victim’s view: something is unfair. For example, Democrats believe that it is unfair that conservatives have been successful on talk radio while Air America was a total failure. Interestingly they don’t seem to think that it is unfair for MSNBC to become the unofficial network of the Obama campaign or that the so-called Main Stream Media gave Obama a pass throughout the entire campaign. As it happens, I don’t think that was unfair at all. I had the freedom to change channels and watch FoxNews or put in a DVD. There is a reason FoxNews is #1. More on the so-called Fairness Doctrine another time.   

To me, fair means that I get treated the same as everyone else, no better, no worse. There is one thing that Barack Obama and I agree on 100%. Our current tax policy is completely unfair. Unfortunately we totally disagree on why we believe it is unfair. Obama claims it is unfair because the rich are not paying enough. There is a simple explanation of this ridiculous situation that has been bouncing around the internet for a while describing what happens when 10 people share lunch every day and pay for it based on our tax system. It has been credited to a Professor T. Davies of the University of South Dakota School of Business, it goes like this:

This is a VERY simple way to understand the tax laws. Read on-it does make you think!!

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, and the tenth man-the richest-would pay $59.

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 (in tax language a tax cut).

"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 $80.00.

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 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 paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. 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, but he, pointing to the tenth. "But he got $7!". "Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too, ........It's unfair that he got seven times more than me!".

"That's true!" shouted the seventh man, "Why should he get $7 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 he 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, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill!

Imagine that!

And that, boys and girls, journalists and college instructors, is how The 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.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!