Tax

The Big Squeeze

The local bar was so sure that its bartender was the strongest man around that they offered a standing $1,000 bet. The bartender would squeeze a lemon until all the juice ran into a glass, and hand the lemon to a patron. Anyone who could squeeze one more drop of juice out would win the money.
Many people had tried over time (weightlifters, longshoremen, etc.) but nobody could do it. One day this scrawny little man came into the bar, wearing thick glasses and a polyester suit, and said in a tiny squeaky voice “I’d like to try the bet.”
After the laughter had died down, the bartender said OK, grabbed a lemon, and squeezed away. Then he handed the wrinkled remains of the rind to the little man. But the crowd’s laughter turned to total silence as the man clenched his fist around the lemon and six drops fell into the glass.
As the crowd cheered, the bartender paid the $1,000 and asked the little man, “What do you do for a living? Are you a lumberjack, a weightlifter, what?”
The man replied, “I work for the ATO.”

Donations to Charity

An auditor from the tax office rang a synagogue and asked to speak to the rabbi.
“Rabbi, is Mr Morris Katz a member of your congregation?”
“Yes, indeed he is.”
“Can you confirm that he made the $100,000 donation to the synagogue that he claimed in his tax return?”
“I can assure you that he will!”

Two Questions

An investor went to a tax expert and said: “If I give you $1,000, will you answer two questions?”
The expert replied: “Certainly. And what is the other question?”

Investment Advice

A financial planner suggested to a wealthy client that he should invest in a circus.
The client expressed great surprise at such an unusual recommendation: “A circus? Why on earth should I buy into a circus?”
The financial planner replied: “Because of the elephants.”
The client, puzzled even more, then asked: “The elephants? What is the connection between circus elephants and investments?”
The financial planner asked: “Well, do you know much it costs to feed an elephant?”
The client, slightly annoyed, responded: “No, of course I do not know much it costs to feed an elephant.”
The financial planner explained: “Well, neither does the Taxation Commissioner.”

Freedom of Information

A man made a Freedom of Information request to the Australian Taxation Office, asking whether there was an audit file on him.
A week later he received the reply. It said: “There is now.”

Grandpa

The TAXATION DEPARTMENT decided to audit Grandpa, and summoned him to the Taxation Office.
The Taxation Office Auditor was not surprised when Grandpa showed up with his solicitor. The auditor says, ‘Well, sir, you have an extravagant lifestyle and no full-time employment, which you explain by saying that you win money gambling. I’m not sure the Taxation Department finds that believable.
‘ I’m a great gambler, and I can prove it,’ says Grandpa. ‘How about a demonstration?’ The auditor thinks for a moment and said, ‘Okay. Go ahead.’
Grandpa says, ‘I’ll bet you a thousand dollars that I can bite my own eye.’ The auditor thinks a moment and says, ‘It’s a bet.’ Grandpa removes his glass eye and bites it. The auditor’s jaw drops.
Grandpa says, ‘Now, I’ll bet you two thousand dollars that I can bite my other eye.’ Now the auditor can tell Grandpa isn’t blind, so he takes the bet. Grandpa removes his dentures and bites his good eye.
The stunned auditor now realizes he has wagered and lost three grand, with Grandpa’s solicitor as a witness. He starts to get nervous.
‘Want to go double or nothing?’ Grandpa asks ‘I’ll bet you six thousand dollars that I can stand on one side of your desk, and pee into that wastebasket on the other side, and never get a drop anywhere in between.’
The auditor, twice burned, is cautious now, but he looks carefully and decides there’s no way this old guy could possibly manage that stunt, so he agrees again.
Grandpa stands beside the desk and unzips his pants, but although he strains mightily, he can’t make the stream reach the wastebasket on the other side, so he pretty much urinates all over the auditor’s desk. The auditor leaps with joy, realizing that he has just turned a major loss into a huge win.
But Grandpa’s own solicitor moans and puts his head in his hands. ‘Are you okay?’ the auditor asks. ‘Not really,’ says the solicitor. ‘This morning, when Grandpa told me he’d been summoned for an audit, he bet me fifty thousand dollars that he could come in here and piss all over your desk and that you’d be happy about it!’

TAX System Explained In Simple Terms

Sometimes politicians, journalists and others 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, I hope the following will help. Please read it carefully.

Let’s put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and 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:

a.. The first four men (the poorest) would pay nothing.
b.. The fifth would pay $1.
c.. The sixth would pay $3.
d.. The seventh would pay $7.
e.. The eighth would pay $12.
f.. The ninth would pay $18.
g.. 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.” Dinner for the ten now cost just $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 men, the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’

They 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:

a.. The fifth man, like the first four, now paid nothing (100% savings).
b.. The sixth now paid $2 instead of $3 (33% savings).
c.. The seventh now paid $5 instead of $7 (28% savings).
d.. The eighth now paid $9 instead of $12 (25% savings)
e.. The ninth now paid $14 instead of $18 (22% savings).
f.. 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 two? 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 anymore. In fact, they might start eating overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, PhD
Professor of Economics
University of Georgia

Dying Businessman

A businessman on his deathbed called his friend and said, “Bill, I want you to promise me that when I die you will have my remains cremated.”

“And what,” his friend asked, “do you want me to do with your ashes?”

The businessman said, “Just put them in an envelope and mail them to the Australian Tax Office . Write on the envelope, “Now, you have everything.”