How do Taxes work for you?

Imagine the entire US Gross Domestic Product is a whopping $10.00 (don’t laugh it may happen).

Now imagine a game where every time the $10.00 changed hands the government took away $1.00.

We start with person number one who has the $10.00.
This person buys a shirt for $10.00.
The government takes $1.00 from the transaction.

Now person two has the $9.00 he got for his shirt and wants to buy a new shirt of his own. So he finds person three who agrees to sell him his shirt for $9.00.
The government takes $1.00 from the transaction.

Now person three has $8.00 and is in need of a shirt.
He finds person four who agrees to part with his shirt for $8.00
Of course the government want’s their cut from this transaction too and takes $1.00.

Now person four has $7.00.

This progresses until you get to person number 9 who will have $2.00 to buy a shirt and finds the last person on earth willing to sell a shirt for $2.00. The Feds show up and take their $1.00, as the Feds always do.

Now person number ten has an interesting dilemma on his hands. He has no shirt but needs to find someone who will give him a shirt for $1.00. But who will pay the $1.00 to the feds on this transaction? Person number ten has a dollar, but that dollar is worthless to him and the question is, where is the other $9.00?