Marriage Builders
Posted By: Mark1952 Taxes and Beer... - 08/10/10 09:36 PM
I know this was posted here before but since I can't find it and the topic came up today when a group of us had coffee together this morning, I decided to post it again.


The US graduated tax system explained through the use beer and bar tabs:

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. �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 total.

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.


Disclaimer:
Before you math wizards tell me that the second group of numbers only adds up to 79 and not 80, I already knew that before I posted this. It wasn't written by a mathematician but by an economist and we all know how their numbers add up. Something is always falling through the cracks.

The analogy is still a valid one.
Posted By: gonefishing Re: Taxes and Beer... - 08/10/10 10:21 PM
AMEN brother AMEN
Posted By: Tawandabelle Re: Taxes and Beer... - 08/11/10 08:38 PM
Go Mark! Go Mark!
Posted By: MrWondering Re: Taxes and Beer... - 08/12/10 02:28 PM
Quote
The nine men surrounded the tenth and beat him up.

Why didn't they just kill him, take his money, his job and his wife???

Posted By: Mark1952 Re: Taxes and Beer... - 08/12/10 03:29 PM
Originally Posted by MrWondering
Quote
The nine men surrounded the tenth and beat him up.

Why didn't they just kill him, take his money, his job and his wife???
Because then they would have to earn their own money and try to keep his wife in the style to which she had become accustomed. It would have cut into their time to hang out with their friends down at the bar and drink beer.

And of course, they would have had no one to blame for their problems. Their predicament would have been their own and they would have nobody to "guilt" into contributing to the consequences of their own choices.
Posted By: MrWondering Re: Taxes and Beer... - 08/12/10 04:40 PM
but the rich man would still be dead....

not a good outcome for him, is it?
Posted By: Mark1952 Re: Taxes and Beer... - 08/12/10 04:58 PM
Dead or unable to continue paying the way for others because it has been taken away, either way the standard of living will go down for everybody and since the poorest will have no one paying their way, they too might wind up dead...

At the very least they will have to give up their beer.

The American Dream is not that someone will step in to take care of you for the rest of your life when you can't take care of yourself and your family. The DREAM is that one day, through your own efforts, you too might be able to buy a round for those less fortunate.

The richest men in America give away over half of their gross income each year. That is in ADDITION to the taxes they pay.

Our "rich uncle" is actually spending other people's money faster than they can earn it in an effort to spend his way out of debt that comes from borrowing more than can be paid back on the income being produced. If you or I did that, we would go to jail. Over 95% of our GDP goes to DEBT of the federal government. You can't borrow your way out of being in debt.

The Robin Hood model only works as long as the rich have enough to take away and give to the poor. Once the rich too are poor, there will be no one left to make the rent payments and everyone will suffer.

And if Robin had used most of the money to build himself his own castle and keep the serfs dependent on him for existence, he'd have never been seen as a hero and when the King returned, he'd have been held accountable and the sheriff would have won.

Mark
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