I'd like to sell you a sandwich.

An analogy of Gasoline prices and the American free market.

I'm a sandwich maker, I make and sell sandwiches. I buy my ingredients, bread, meat, lettuce, tomato, mustard, mayonaise, etc., at the local market.

I sell each sandwich for $1.00.

The ingredients for a single sandwich cost me $0.75. Part of that $0.75 is sales tax, 8%, or 5.5 cents.
The government (State, Local, & Federal) requires that I collect $15.5 cents for taxes on each sandwich I sell.

So after selling you the sandwich for $1.00, recouping the cost of making the sandwich, and taking out the taxes, I have 9.5 cents in profit. But, because that is income, the government wants part of that too. In my current tax bracket I pay 31.6% in taxes. So, 3 cents on each sandwich I sell also goes to the government.

So, for the sandwich I made, the store that sold the ingredients got 69.5 cents, the government who did nothing at all got 24 cents, and I got 6.5 cents. So my percentage of profit is 6.5%.

Let's say I sell 88 Billion Sandwiches, at $1.00 each.

It has now cost me $61.16 billion dollars in ingredients.

You might think that I would get $5.72 billion after taxes but I'm in a much higher tax bracket and now instead of 31.6% in taxes,
I pay 83% in taxes, or $6.9388 billion.

So, 8% of the $61.16 billion for the ingredients is $4.8928, plus 15.5% of the $88 Billion in sandwich sales is $13.64 billion. $4.8928 + $13.64 + $6.9388 = $25.4716

So the government gets $25.4716 billion total, even though it still hasn't done anything to contribute to the sandwich making.

I'm left with $1.3684 billion dollars in profit. My profit percentage is down to just 0.01555.

One day the price of Bread goes up 150%. So now the ingredients for 88 Billion sandwiches costs $70 billion instead of $61.16 billion. I don't want to make less of a profit, So the price of a single sandwich goes up from $1.00 to $1.11.

88 billion sandwiches at $1.11 = $97.68 billion
Ingredients = $70 billion
Taxes = $5.6 (8% of $70) + $13.64 (15.5 cents per sandwich) + $7.0052 (income tax on my profits) = $26.2452 billion
Profit = $1.4348 (0.01469%)

So the sandwich buyers look at the extra 11 cents they had to pay and then they look at the extra $66.4 million dollars I made selling this batch of sandwiches and accuse me of price gauging even though my profit margin is actually smaller. While behind the scenes the government laughs it up with the extra $773.6 million dollars they got (almost 12 times more than what I got) for doing nothing.

So when 8% of that extra 11 cents you are paying is for taxes, and only a seventh of 1% of that extra 11 cents is my profit who's really gauging the average american sandwich buyer?

Subsidies -
In response to Jason's question about subsidies here is a quick tutorial on subsidies as it would relate to my Sandwich business.

One of the reasons reasons the tax on each sandwich is so high, is so the government can use the money for Sandwich subsidies. Subsidies are money that the government pays to a business so that the business will do something it wouldn't normally do on it's own, because it isn't profitable. So far as I know the amount a company receives in subsidies isn't included as part of their reported profits, but I could be wrong about that. Since subsidies are not used in any way to pay for Sandwich production I didn't mention it in the calculations above.

In this case the government pays me a subsidy to maintain a reserve storage of bread, meats, and other ingredients. See, the government is worried that so many people depend on my Sandwiches. If there was an emergency such as a hurricane destroying the wonder bread factories, then there would be a shortage of bread and therefore sandwiches, and this would drive up sandwich prices to $3.00 a sandwich. So the government pays me to keep a reserve supply of bread, which I wouldn't normally do, because I don't make any money storing bread.

Another subsidy the government pays me, is to help defend, service and maintian wheat and tomato crops in areas where they are in danger due to some local political unrest. For example, most of our tomatoes come from Northern California. The military invades Northern California to get that horrible dictator Arnold Schwarzeneggar out of power. This endangers tomato production, so I help to keep the tomatos safe, again insuring that the Sandwich supply remains stable.

The government also pays me a subsidy to research ways to make Sandwiches more healthy, and ways to reduce the amount of waste produced from Sandwich consumption (wrap your head around that one).

Baby Names

Here are names that I thought would've been better for Tom and Kate's illegitimate baby:

Carrie Bien Cruise
Alice Ken Cruise
Carnie Val Cruise
Nora Weejin Cruise
Yuri Pien Cruise

How Taxes and Tax cuts work

From a letter to the Chicago Tribune, March 4, 2001 (author unknown) -

Every night, 10 men met at a restaurant for dinner. At the end of the meal, the bill would arrive. They owed $100 for the food that they shared.

Every night they lined up in the same order at the cash register. The first four men paid nothing at all. The fifth, grumbling about the unfairness of the situation, paid $1. The sixth man, feeling very generous, paid $3. The next three men paid $7, $12 and $18, respectively.

The last man was required to pay the remaining balance, $59. He realized that he was forced to pay for not only his own meal but the unpaid balance left by the first five men.

The 10 men were quite settled into their routine when the restaurant threw them into chaos by announcing that it was cutting its prices.

Now dinner for the 10 men would only cost $80. This clearly would not affect the first four men. They still ate for free. The fifth and sixth men both claimed their piece of the $20 right away. The fifth decided to forgo his $1 contribution. The sixth pitched in $2. The seventh man deducted $2 from his usual payment and paid $5. The eighth man paid $9. The ninth man paid $12, leaving the last man with a bill of $52.

Outside of the restaurant, the men began to compare their savings, and angry outbursts began to erupt.

The sixth man yelled, "I only got $1 out of the $20, and he got $7," pointing at the last man.

The fifth man joined in. "Yeah! I only got $1 too. It is unfair that he got seven times more than me."

The seventh man cried, "Why should he get $7 back when I only got $2?"

The nine men formed an outraged mob, surrounding the 10th man.

The first four men followed the lead of the others: "We didn't get any of the $20. Where is our share?"

The nine angry men carried the 10th man up to the top of a hill and lynched him.

The next night, the nine remaining men met at the restaurant for dinner.

But when the bill came, there was no one to pay it.

For Always...

Pictures Of You

Lauren, Elysse, Sariah, and Harley feeding the fish at Lake Mead


Sariah at the jewelry store, the day we bought her engagement ring


Carter and Sariah (on our second date)

The new SLAVE class

And here I thought slavery was made illegal in the United States with the 13th Amendment to our constitution.

So, now we've got our Congressmen and our President talking about allowing illegal aliens to remain in our country to work jobs that Americans won't work. It makes me sick every time I hear that phrase. I bet this same argument was made in the debate arguing to keep slaverly legal over 100 years ago. "Those black slaves are doing jobs that white people won't do."

I just listened to Ted Kennedy on the Senate floor talking about his immigration bill. He talks about all the new laws that it will create. Mr. Kennedy, what difference will that make when we don't enforce the laws that already exist? He talks about how his bill is not giving illegal aliens amnesty. Yet, he just said minutes before that we must recognize that we won't be deporting the 11 million illegal aliens we have in the country now. So, they are here illegally and won't be deported, they face no punishment for their crime. Mr. Kennedy, how is that not amnesty? That is the very definition of amnesty.

So, at what point are we going to need another amendment to the constitution to free all of our new slaves? When do we enforce our labor laws and insist that all these "guest workers" are paid at least minimum wage? When will they to be given an apology and promised a plot of land and a donkey to compensate the violation of their human rights?

We have 11 million illegal aliens in this country because in 1986 we gave amnesty to 3 million. So if we do this again, in 2026 are we going to have to debate what to do with the 37 million illegal aliens we will have in the country?