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From: tan@ihu1e.UUCP (exit)
Newsgroups: net.politics
Subject: Re: taxes and the deficit
Message-ID: <340@ihu1e.UUCP>
Date: Tue, 30-Oct-84 17:49:01 EST
Article-I.D.: ihu1e.340
Posted: Tue Oct 30 17:49:01 1984
Date-Received: Wed, 31-Oct-84 01:25:19 EST
References: <534@charm.UUCP>
Organization: AT&T Bell Labs, Naperville, IL
Lines: 33


George Lake, of AT&T Bell Labs Physics Research, submitted the
following:
________________________________________________
The following is only meant to be suggestive of the REAL cost of
the deficit and the real meaning of Reagan's "tax cuts".
The deficit is ~175 billion.  There are roughly 50 million families
in the US.  This is $3,500./family.  Since the median family income
is rougly $25,000., we are talking about an as yet "hidden tax"
of nearly 15%.  Are you really happy with that extra $50 you take
home every month?
________________________________________________
Unfortunately, George makes a mistake that no physicist should ever
make.  He is comparing two quantities with different units, hence
his 15% figure is nonsensical.  The deficit per family is roughly
3500 dollars.  The median family income is roughly 25000 dollars
PER YEAR.  The ratio is ~0.15 years, or about 2 months.  This figure
is not a tax rate, but the amount of time the average wage earner
would have to work to pay off his/her share of the deficit.
	A valid computation of the "hidden tax" due to the deficit
would use the annual interest on the deficit, so here goes:
The interest on the deficit per family is approximately 400 dollars
per year($3500 * 12%(a guess) interest rate).  The median family
income is 25000 dollars per year.  The hidden tax is about 1.7% of
the income of the family.
	I have no idea if the above input figures are accurate.
I am just using George's own figures.
	By the way, I am not for Ronnie.  I think that, on balance,
Mondale is by far the lesser evil.  There are enough valid reasons
to dispose of the Gipper that we shouldn't have to make up spurious
ones.  But, if my own short-term personal economic well being was
the only issue, I would vote for Reagan.
				Bill Tanenbaum