Tax Policy Explained in Beer

[CuteOldGuy]

Maybe now you will understand.

Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100.
If they paid their bill the way we pay our taxes, it would go something like
this…

The first four men (the poorest) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve ball. “Since you
are all such good customers,” he said, “I’m going to reduce the cost of your
daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the
first four men were unaffected. They would still drink for free. But what
about the other six men ? How could they divide the $20 windfall so that
everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that
from everybody’s share, then the fifth man and the sixth man would each end
up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill
by a h higher percentage the poorer he was, to follow the principle of the
tax system they had been using, and he proceeded to work out the amounts he
suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to
drink for free. But, once outside the bar, the men began to compare their
savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He
pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too.
It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get $10 back, when I
got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get
anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down
and had their beers without him. But when it came time to pay the bill, they
discovered something important. They didn’t have enough money between all of
them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our
tax system works. The people who already pay the highest taxes will
naturally get the most benefit from a tax reduction. Tax them too much,
attack them for being wealthy, and they just may not show up anymore. In
fact, they might start drinking overseas, where the atmosphere is somewhat
friendlier.

David R. Kamerschen, Ph.D. – Professor of Economics.

[Seedy]

Excellent analogy COG. But you know as well as i , that the libs ( actually communists) will say that just can't be, and complain about something, that the poor people are still getting fucked over.

[Guest123018-4]

In reality the first two would be paid to drink beer with them.

[nwarounder]

Lol, no response...Maybe some folks get it now?

[4karlos]

Freakonomics are fun but can't be taken seriously. Skewed statistics and distorted analogies make a light fun reading but need to be kept away from politics and real life.

[Doove]

Originally Posted by nwarounder

Lol, no response...Maybe some folks get it now?

It's only about the 5th time that analogy's been used in here.

[joe bloe]

Originally Posted by 4karlos

Freakonomics are fun but can't be taken seriously. Skewed statistics and distorted analogies make a light fun reading but need to be kept away from politics and real life.

Sounds to me like your concept of economics is similar to your avatar's art style, surreal. People who buy into socialism usually can't be reasoned out of it, because it's grounded in emotion. Socialism has ruined Europe and it's just about to ruin us. By the way, Freakonomics isn't plural.

[CuteOldGuy]

Originally Posted by Doove

It's only about the 5th time that analogy's been used in here.

We'll keep using it until you understand it.

[Guest123018-4]

COG, they cannot associate beer or food with anything. The donot have the mental ability or cognitive skills ot put two and two together. To them they see nothing wrong with getting free beer or getting paid to drink it.

I do not even think that if they stopped withholding and you got paid at one table and moved to the next and paid your taxes that they would understand where they money came form or where it was going.

[4karlos]

Originally Posted by joe bloe

Sounds to me like your concept of economics is similar to your avatar's art style, surreal. People who buy into socialism usually can't be reasoned out of it, because it's grounded in emotion. Socialism has ruined Europe and it's just about to ruin us. By the way, Freakonomics isn't plural.

Yup. A Stanford degree and 25 years of executive career in 3 continents is a license for enjoying surrealistic views in any field I please to. By the way, my English suck as it is not my native language...just third out of the 4 I speak...but you might have missed that there "are more than 1" book with the title freakonomic...so plural is the right way to mention "them"

Save yourself the rebuttal...I am not interested. I am here for the ladies and for sharing opinions about things I know, with people who know first hand what they talk about.

[CuteOldGuy]

Stanford degree, executive, multi-lingual, and still dumb as a box of rocks. Welcome to America!

[IIFFOFRDB]

Originally Posted by 4karlos

Yup. A Stanford degree and 25 years of executive career in 3 continents is a license for enjoying surrealistic views in any field I please to. By the way, my English suck as it is not my native language...just third out of the 4 I speak...but you might have missed that there "are more than 1" book with the title freakonomic...so plural is the right way to mention "them"

Save yourself the rebuttal...I am not interested. I am here for the ladies and for sharing opinions about things I know, with people who know first hand what they talk about.

35 years of street smarts here. Working like a Man. My english is OK. I do live in AMERICA. Freak all you want. "them" can kiss my ass. Euro trash skanks. Enjoy this. http://www.youtube.com/watch?v=unBVFdZS0kY

[joe bloe]

Originally Posted by 4karlos

Yup. A Stanford degree and 25 years of executive career in 3 continents is a license for enjoying surrealistic views in any field I please to. By the way, my English suck as it is not my native language...just third out of the 4 I speak...but you might have missed that there "are more than 1" book with the title freakonomic...so plural is the right way to mention "them"

Save yourself the rebuttal...I am not interested. I am here for the ladies and for sharing opinions about things I know, with people who know first hand what they talk about.

"By the way, my English suck" English is singular. That would be, English sucks. Congratulations on speaking four languages. I'm still working on English. I figure, after I learn to speak it, I'll move on.

While you were at Stanford, you should have spent some time at the Hoover Institution. Thomas Sowell could have explained to you why socialism doesn't work.

[Doove]

Originally Posted by CuteOldGuy

Stanford degree, executive, multi-lingual, and still dumb as a box of rocks. Welcome to America!

Some comments say more about the speaker than they do the subject.

[Guest123018-4]

COG, you would insult a box of rocks by comparing them to liberals?