1 00:00:01,270 --> 00:00:08,690 Once upon a time, there were three brothers, triplets, named Tom, Dick, and Harry Class. 2 00:00:08,720 --> 00:00:13,480 They were raised in the same home, with the same parents, had the same IQ, 3 00:00:13,480 --> 00:00:19,240 same skills and same opportunities. Each was married and had two children. 4 00:00:19,240 --> 00:00:23,540 They were all carpenters making $25 per hour. 5 00:00:23,540 --> 00:00:28,260 While they were very similar in all these respects, they had different priorities. 6 00:00:28,260 --> 00:00:34,440 For example, Tom, chose to work 20 hours per week, while his brother, Dick worked 40 hours 7 00:00:34,440 --> 00:00:36,540 and Harry 60. 8 00:00:36,540 --> 00:00:42,960 It should also be noted that Harry's wife worked full time as an office manager for a salary of $50,000. 9 00:00:42,960 --> 00:00:48,660 Dick's wife sold real estate part time 10 hours a week and made $25,000 per year. 10 00:00:48,820 --> 00:00:51,660 Tom's wife did not work. 11 00:00:51,660 --> 00:00:56,980 Tom and Dick spent all of their family income. Since they paid into Social Security they figured, 12 00:00:56,989 --> 00:01:02,460 they didn't need to save for retirement. Harry and his wife, on the other hand, had, 13 00:01:02,460 --> 00:01:08,140 over many years, put away money each month and invested it in stocks and bonds. 14 00:01:08,140 --> 00:01:16,400 Here's how it worked out: Tom made $25,000 a year, Dick and his wife made $75,000 15 00:01:16,420 --> 00:01:21,080 and Harry and his wife, $150,000. 16 00:01:21,080 --> 00:01:24,100 When a new housing development opened up in their community, 17 00:01:24,100 --> 00:01:28,880 the brothers decided to buy equally-priced homes on the same private street. 18 00:01:28,880 --> 00:01:34,159 One day the brothers decided to pool their funds for the purpose of improving their street. 19 00:01:34,159 --> 00:01:39,189 Concerned about crime and safety, and wanting a more attractive setting for their homes, 20 00:01:39,189 --> 00:01:43,949 the three families decided to install a security gate at the street's entrance; 21 00:01:43,949 --> 00:01:48,389 repave the street's surface; and enhance the lighting and landscaping. 22 00:01:48,389 --> 00:01:52,689 The work was done for a total cost of $30,000. 23 00:01:52,689 --> 00:01:57,909 Harry assumed they would divide the bill three ways, each brother paying $10,000. 24 00:01:57,909 --> 00:02:02,849 But Tom and Dick objected. "Why should we pay the same as you?" they said. 25 00:02:02,849 --> 00:02:05,380 "You make much more money than we do." 26 00:02:05,380 --> 00:02:09,740 Harry was puzzled. "What does that have to do with anything?" he asked. 27 00:02:09,750 --> 00:02:13,910 "My family makes more money because my wife and I work long hours, and because 28 00:02:13,910 --> 00:02:17,970 we have saved some of the money we've earned to make additional money from investments. 29 00:02:17,970 --> 00:02:20,540 Why should we be penalized for that?" 30 00:02:20,550 --> 00:02:25,030 "Harry, you can work and save all you like" Tom countered. 31 00:02:25,030 --> 00:02:29,040 "But my wife and I want to enjoy ourselves now, not 25 years from now." 32 00:02:29,040 --> 00:02:34,620 "Fine, Tom. Do what you want. It's a free country. But why should I have to pay for that? 33 00:02:34,620 --> 00:02:39,340 "I can't believe your being so... unbrotherly," Tom argued. 34 00:02:39,340 --> 00:02:43,220 "You have a lot of money and I don't. I thought you'd be more generous." 35 00:02:43,220 --> 00:02:47,500 At this point, Dick, the peacemaker in the family, entered the conversation. 36 00:02:47,500 --> 00:02:56,120 "I've got an idea," Dick said. "Our combined income is $250,000, and $30,000 is 12 percent of that amount. 37 00:02:56,120 --> 00:03:01,920 Why don't we each pay that percentage of our income? Under that formula, Tom would pay $3,000, 38 00:03:01,920 --> 00:03:05,800 I would pay $9,000, and Harry would pay $18,000." 39 00:03:05,800 --> 00:03:10,600 "I have a much better idea," said Tom. "And one that's fairer than what you're proposing." 40 00:03:10,600 --> 00:03:12,780 Dick and Harry turned to Tom. 41 00:03:12,780 --> 00:03:21,620 "Harry should pay $23,450; Dick, you should pay $6,550; and I will pay nothing." 42 00:03:21,720 --> 00:03:27,800 To Dick this sounded completely arbitrary, and not really fair. But it did have one big plus. 43 00:03:27,800 --> 00:03:34,720 His share would be $2,450 less under Tom's formula than under his own. 44 00:03:34,780 --> 00:03:37,900 So, he decided to be silent. 45 00:03:37,900 --> 00:03:40,720 Harry, however, was stunned. 46 00:03:40,720 --> 00:03:44,760 "You want me to pay almost 80% of the bill despite the fact that 47 00:03:44,760 --> 00:03:48,420 each of us is receiving the exact same benefits? 48 00:03:48,440 --> 00:03:51,240 Where did you get such a crazy idea?" 49 00:03:51,240 --> 00:03:57,020 "From no less an authority than the U.S. government," Tom responded, as he pulled out a gray booklet. 50 00:03:57,020 --> 00:04:02,120 "It's all right here in the IRS tax tables. This is the progressive income tax system 51 00:04:02,130 --> 00:04:07,270 all U.S. taxpayers live under, and I don't see we should be any different. In fact, 52 00:04:07,270 --> 00:04:11,040 I believe all future improvements should be paid in this way." 53 00:04:11,040 --> 00:04:17,799 "Works for me," said Dick. So, by a vote of two to one, the cost of the street improvements 54 00:04:17,799 --> 00:04:22,610 was divided as Tom had proposed, even though they benefited equally, and even though the 55 00:04:22,610 --> 00:04:27,020 reason Harry had more money was that he and his wife had worked many more hours than his 56 00:04:27,020 --> 00:04:31,020 brothers and their wives, and saved some of what they had earned 57 00:04:31,020 --> 00:04:33,280 instead of spending it all. 58 00:04:33,280 --> 00:04:38,419 Tom and Dick lived happily ever after with their new arrangement. Harry grumbled a lot, 59 00:04:38,419 --> 00:04:43,699 but whenever he complained his brothers called him greedy and selfish. 60 00:04:43,700 --> 00:04:46,980 The end.