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how our tax system works-- Great way to convert beer drinking liberals
Posted February 8th, 2008 by Sacramento_Jeff
output
This may be the single best explanation of how the tax system works in
the US, and the problems with those that demagogue it.
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 one day, the owner
threw them a curve. He said, "Since you are all such good customers, 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 $2 ? 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 any more. In fact, they might
start drinking overseas where the atmosphere is somewhat friendlier.
Author unknown
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
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You forgot about the tab
Good alalogy, but...
You forgot to have each person running a tab in their kids' names for $2 each time the go out.
Having the bill paid in full at the end of each night make the analogy wrong by itself.
Good, clear analogy
Thanks for posting this. I'm already sharing it around.
How about...
Everybody pays for their own damn beer?
If the rich guy wants to buy the others a beer from time to time, just to be generous, he's free to do so.
Maybe we should try that here!
Everybody keeps the fruits of their labor and spends it how they see fit. What a concept.
I added some:
I received this in an email yesterday from a friend who has been toying with supporting Ron Paul and has been learning about the financial stuff. Anyway, I replied with the following addition:
FUN!! But don’t forget about the most important part of the system:
**The beer being purchased by the bar-owner, of a brand voted on by six of the ten men, is bought using a credit card.
**The bar owner gives all the money he makes on the beer to his neighboring bars as part of a neighborhood association - and even pays for every bouncer on the strip!
**Even though he is doing this for good reasons, he has no money left and can only pay for the interest payment on his credit card.
**So his principal balance continues to grow every week, it “appears” his credit has no limit so he continues to do it.
**It gets so bad, that in order to eat, he actually borrows food and money from the big disco club on the strip.
**This continues for many years until one day, the disco club stops giving him food money and offers to buy the beer for him as long as he gives them the beer money from the ten men.
**Eventually, the man needs to sell the bar, and his loyal ten patrons must split and agree that one man will drink beer in each bar on the strip in order to pay his debt.
What do you think?
The 10th Man...
The next night the tenth man didn't show up for drinks...he left for Galt's Gulch. The beer is much better there. I think I might be headin' there myself, real soon now.
Well, thanks for the
Well, thanks for the recommendation, I would sure appreciate a good beer right now, it makes me forget about taxes and other troubles. Any other good beer clubs I should know about?
You are a good
story teller. I like it alot. If ithe story didn't have so many amounts, it could be a great addition to RP's speeches! Way To Go! Thanks!
ty but I did not write it
.
Was # 10 a CFR member? Did
Was # 10 a CFR member? Did he move to Dubai where he drank for free?
Were the other 9 eventually reduced to indentured bond servantry and had no beer to drink anymore?
Did the bartender eventually follow his high paying patron to Dubai in hopes of feeding on the crumbs of the rich as he had no paying clientele in the U.S.
Who took over the bar after it went out of business?
omg stop wih the cfr.
please
I know!
I do believe this CFR yields way too much power, but what has that got to do with getting Dr Paul elected?
OK, the math is all I see.
If 10 guys go out to a bar and all drink equally and the tab is $100, their share of the bill ought to be $10, PERIOD. If it totals less than $10 for any one individual, it's ought to be due to the GENEROSITY of at a minimum at least one of the other individuals. Anything else amounts to sticking someone else with their fair share of the tab at best, and a mugging at worst.
Seeing as how we're talking proverbial here...I'd say our current system is more like a proverbial mugging. If you don't pay for the entitlements of others, you get mugged by the government in the form of liens, garnishments, and imprisonment.
As for the example above, the wealthy (beer drinker #10) didn't reap the largest reward, the middle class (proverbial beer drinker #6) did, and once again, at the expense of the wealthy.
The others misunderstanding of basic math caused them to victimize the guy footing the bill.
I don't get it.
When I go out with my friends, we usually fight over who is gonna pay the WHOLE tab.
it is only a mugging if it is violent
.
Class is in session
Are you a lawyer or something?
Perhaps you missed this sentence "The nine men surrounded the tenth and beat him up." in the story.
Now, proverbially speaking, I don't know what's more violent than confiscating all your belongings and imprisoning you for failure to pay the 'voluntary' federal income tax. Or perhaps you don't consider using physical force and the threat of personal bodily injury violent.
Although this professor
Although this professor didn't write it. -JP
http://davidk.myweb.uga.e...
Who cares who wrote it.
Swallow a camel and strain out a gnat
then don't ascribe it to the
then don't ascribe it to the post
it was emailed to me
I do not care who wrote it. It still makes sence. I left the author there because I did not want to take credit for it.
but edited for you anal indivuals
beer ponzi scheme
I guess the "richest" man in this equation isn't a member of the Federal Reserve Banking cartel, because I do believe that the likes of David Rockefeller and his amoral, anational cabal of Globalists, the Pro-Stalinist Right, and the Pro-Leninist Left (and other assorted fascists, "neoconservatives" and one-worlders) would have a ponzi scheme in place to drink all of the beer that they wanted for free, whenever they wanted.
"We don't have to start a brand new revolution...All we have to do is restore the original Constitution." -Ron Paul
Never heard it
put this way (and I'm an author on tax policy!). THANKS-jp
Nice. Bump
Nice. Bump