More for me.
Posted on 10/10/2008 5:57:59 AM PDT by new cruelty
Bar Stool Economics
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 on day, the owner threw them a curve. "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 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 - the paying customers? 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 roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20,"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 than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The 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 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 college professors, is how our tax system works. The people who pay the highest taxes 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 University of Georgia
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Thanks
Principle works regardless if its beer or white wine consumed.
Genius. We could teach a lot of folks a lot of things with this pithy piece. Kudos.
Yes it does. It even works with donuts!
The poor in this country are not like the poor from the 1930’s. Back then they had survival skills, now they only know how to hold their hands out, and many won't survive. It's sad how they've allowed themselves to be indoctrinated that they're owed a living because they're “disadvantaged”. They don't know how to do without. It's gonna get ugly.
But with beer, it held my interest.
The real lesson is the need to rid ourselves of the graduated income tax. A system that pits. as in the bar story, the freeloaders and the producers.
All should pay and all should pay the same percentage regardless. If you don’t contribute you don’t vote. Simple. Unfortunately no one seems to understand that it isn’t tax cuts for the rich, it is tax cuts for taxpayers.
I’m not really excited about having freeloaders deciding with government to heist my dough for their welfare and that is precisely what is happening and as freeloaders become the majority, the producers will either be forced to quit, or forced to live with the system.
I was surprised to see the author was employed at a college. But this college also had Newt on the payroll once (I think it was UoG), so that dampened the surprise somewhat. I guess not all colleges are populated with 100% loony leftists.
This article is great!
More for me.
I was wondering if the guy actually existed or if someone just made up the name. Apparently he does.
Then you would really hear the wealthy dropping their silver spoons. There would be no place to hide and no breaks. Fair tax!
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
LFOdrink alone...heheheh [you guys understand]...
I think that we could safely add that under Obamanomics, the four guys who didn’t have to pay would, in fact get at least $3.00 a piece and maybe an extra beer or two.
FWIW, I know someone who is with economists every single day and yesterday that person said that every one of these people think that part of the panic is the prospect of Obamanomics becoming a reality. These are people who live in his part of Chicago, Hyde Park and they think his Presidency would be a disaster....there are some sane people even in Hyde Park.
Let’s hope they all show up at the polls at vote against obama.
The leftist solution = The tenth man must pay wether he drinks or not.
did you also tell them that if they see less of mr’s Smith and Jones, they will have less hr’s of work
I can think of several people that need to see this...but they’re so big-headed it’ll probably be like banging my head against a brick wall. Like it says in my quote, let ‘em learn the hard way.
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