The Progressive Income Tax: A Tale of Three Brothers | 5 Minute Video

"The Progressive Income Tax" is one of those economic terms that gets bandied about, but few actually know what it means or how it works. This tale of three similar brothers with three different incomes (but one shared expense) helps explain the tax system under which we live. Adapted from an article by noted investor and economist, Kip Hagopian, and narrated by actress Carolyn Hennesy of "General Hospital" and "True Blood" fame, this animated story will change the way you think about how you pay your taxes. 

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Script:

Once upon a time, there were three brothers, triplets, named Tom, Dick, and Harry Class. They were raised in the same home, with the same parents, had the same IQ, same skills and same opportunities. Each was married and had two children. They were all carpenters making $25 per hour.

While they were very similar in all these respects, they had different priorities.

For example, Tom, chose to work 20 hours per week, while his brother, Dick worked 40 hours and Harry 60.

It should also be noted that Harry's wife worked full time as an office manager for a salary of $50,000. Dick's wife sold real estate part time 10 hours a week and made $25,000 per year. Tom's wife did not work.

Tom and Dick spent all of their family income. Since they paid into Social Security they figured, they didn't need to save for retirement. Harry and his wife, on the other hand, had, over many years, put away money each month and invested it in stocks and bonds.

Here's how it worked out: Tom made $25,000 a year, Dick and his wife made $75,000 and Harry and his wife, $150,000.

When a new housing development opened up in their community, the brothers decided to buy equally-priced homes on the same private street.

One day the brothers decided to pool their funds for the purpose of improving their street. Concerned about crime and safety, and wanting a more attractive setting for their homes, the three families decided to install a security gate at the street's entrance; repave the street's surface; and enhance the lighting and landscaping. The work was done for a total cost of $30,000.

Harry assumed they would divide the bill three ways, each brother paying $10,000. But Tom and Dick objected. "Why should we pay the same as you?" they said. "You make much more money than we do." Harry was puzzled. "What does that have to do with anything?" he asked. "My family makes more money because my wife and I work long hours, and because we have saved some of the money we've earned to make additional money from investments. Why should we be penalized for that?"

"Harry, you can work and save all you like" Tom countered. "But my wife and I want to enjoy ourselves now, not 25 years from now."

"Fine, Tom. Do what you want. It's a free country. But why should I have to pay for that?

"I can't believe your being so... unbrotherly," Tom argued. "You have a lot of money and I don't. I thought you'd be more generous."

At this point, Dick, the peacemaker in the family, entered the conversation. "I've got an idea," Dick said. "Our combined income is $250,000, and $30,000 is 12 percent of that amount. Why don't we each pay that percentage of our income? Under that formula, Tom would pay $3,000, I would pay $9,000, and Harry would pay $18,000."

"I have a much better idea," said Tom. "And one that's fairer than what you're proposing."

[MTopRoller]

This is what Ben Shapiro would read his kid every night.

[GG-mnfr]

Harry moved out.
Tom and Dick couldn't pay for upkeep.
The neighbourhood became a shithole.
Tom and Dick were killed on a drive by shooting

[jefftickleschitz]

And this is why Harry moved out of California

[jasminesyan]

In real life: Harry would leave and Dick would foot the bill (i.e middle class)

[JoeySaladsShorts]

missed the part where the rich brother moved to a different neighborhood and they other 2 brothers couldnt afford the bill

[Burps___]

It’s actually not The End.

Harry, who could afford to move off the street, did just that. Tom & Dick, left to pay for all future upkeep and improvements to their street, lived with cracked asphalt and dead flowers behind rusty gates.

[stuarttrapani]

I wish I could afford a house while making 25k a year

[hlicj]

After a while, Harry sold his house to someone with a lower income and found new friends. Now Tom and Dick were in the same situation as Dick and Harry in the previous step. The next investment went as before. Now Dick moved out and sold to someone with a lower income. Tom was now left alone with all the economic responsibilities in their neighborhood, and no good brothers to share the burden with. There goes the neighborhood. Predictably everything went downhill from there, but Harry lived a happier life in a new neighborhood with better neighbors. the end.

[FeCyrineu]

Once there were 2 kids who meet at school and became best friends. One is named Brian, his father was a janitor and he never knew his mother. The other kid was Logan, his father was a wealthy businessman and his mother was renowed doctor. When they entered high school, Brian had to get a part time job to help his father with the bills, while Logan went on very expensive trips on his free time. When they finished high school, Brian couldn't afford to go to college, while Logan could. Brian started working in a fast food restaraunt, while Logan was in College, but he never worked hard in his studies. Logan soon finished college and tried to start a bussines with his father's money, but found it too much trouble, so he just stayed unemployed, living off with the money of his parents. One day they meet each other, and Brian was surprised how Logan had soo much money, yet didn't have a job. And Logan was surprised how Brian worked soo much, yet had very little money.

[gwbgdic]

Moral of the story:
Keep you income a secret, even from your brothers

[PaladinLeeroy]

I appreciate that Tom is on the left and Harry is on the right ..literally

[catxxcrack]

aw yes i love that US city where a guy making 25k a year for his family of 4 can afford to live on the same street as a guy making 100k.

[ShadowAkatora]

And then Harry moved to another street

[arhgentumm]

There has never been a peace maker in the family named Dick

[iknowgoodvids]

They forgot to mention the fourth brother, Dennis, who also lives in the community and sold them each their houses, but convinced everyone else pay for the upgrades in the first place.

[dylanburnell]

I love how there are 25 thousand dislikes for this video. Like who the hell genuinely thinks this is fair?

[corbinmcnabb]

Next episode: Wealthy brother sells home and moves. New neighbors make less.

[matthardy]

Not the end, Harry sold his house and moved to a less entitled neighborhood, leaving Tom and Dick screwed.

[marvolovodka]

What about the 4th brother given a terrible situation works 60 hours a week to only barely be able to afford the food and rent.

[Paul-sjdb]

Alternative ending. Harry moved away. Tom expected Dick to pay even more. So Dick moved away too. Tom couldn't afford the upkeep, so the house and street fell into disrepair and eventually Tom's wife left and Tom spent the rest of his days staring at the bottom of a bottle of beer.