[desertrat]

This is the absolute best explanation of how our tax system is
"supposed" to work I have ever personally seen, it comes from an
Economics professor at the University of Georgia. I encourage you to
take the two minutes to read through this brilliant explanation,
it is well worth the read.

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.

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.

[vicc]

Interesting for sure there but I am even more sure many people will read that and never fully understand so for that I wish to pass a law allows those who get it to be able to smack those who do not. I feel kinda evil today.

[drfunk1986]

i definitley gets it and I love how it was broken down. Sorry for the 10th guy, he got beat up.

[LSC9901]

Originally Posted by drfunk1986

i definitley gets it and I love how it was broken down. Sorry for the 10th guy, he got beat up.

Don't feel bad for him. He owns a glass company. They make beer bottles and the glasses the beer is drank from and the ashtrays you put the cigarettes in. He's got more money than he knows what to do with. Especially since all of his plants are abroad.

[drfunk1986]

but he got beat up. That must've hurt. plus if you consider that those guys were probably drunk (because they did come out of the bar after drinking), they can be roudy too. Who knows? maybe he's in the hospital recovering from the beating, they might've busted a beer bottle over his head.

[Curves24]

That is so cool!
Every person should have to read that and at least try to understand it. Of course 1-4 still would not care until the free beer ran out
Thanks for posting that mind if I steal it?

[Racer Duck]

Originally Posted by Curves24

That is so cool!
Every person should have to read that and at least try to understand it. Of course 1-4 still would not care until the free beer ran out
Thanks for posting that mind if I steal it?

unfortunately, some of 1-4 can't read 'cause they've been discriminated against (at least that's what they say) and are really PO'd there's no more free beer. after all, they're "entitled" to it!!!

[Boobleay]

I wish I had you guys on another forum I visit... I can not for the life of me make these people acknowledge that it is wrong to take money from one American to write a check to another American. I feel like I could go on a rant here but I'll leave that for the political site.

[desertrat]

Originally Posted by Curves24

That is so cool!
Every person should have to read that and at least try to understand it. Of course 1-4 still would not care until the free beer ran out
Thanks for posting that mind if I steal it?

Sure, go ahead and use it.

[Bob Tanner]

If you enjoyed this analogy (and I did) and want to read a novel which deals with the same example over a nationwide scale, I suggest you go to the library and pick up Atlas Shrugged by Ayn Rand. Personally I think it should be mandatory reading in todays 11th or 12th grade government schools.

The good Doctor's little story is a perfect example of Marxist doctrine, straight from Karl Marx's review of the Gotcha Program, and later Das Kapital; "From each according to his ability to each according to his needs."

[Curves24]

Originally Posted by Bob Tanner

If you enjoyed this analogy (and I did) and want to read a novel which deals with the same example over a nationwide scale, I suggest you go to the library and pick up Atlas Shrugged by Ayn Rand. Personally I think it should be mandatory reading in todays 11th or 12th grade government schools.

The good Doctor's little story is a perfect example of Marxist doctrine, straight from Karl Marx's review of the Gotcha Program, and later Das Kapital; "From each according to his ability to each according to his needs."

Are you joking? LOL sorry couldn't resist. I am sending you a pm Bob

[drfunk1986]

you know? this analogy could lead to violence. I mean, come on, the first 4 guys beat up the rich guy. What if the rich guy returns with guns the next time huh? anybody think of that? It would be a disastor.

[Racer Duck]

Originally Posted by drfunk1986

you know? this analogy could lead to violence. I mean, come on, the first 4 guys beat up the rich guy. What if the rich guy returns with guns the next time huh? anybody think of that? It would be a disastor.

why would the rich guy return at all? I'm sure if he wanted to "off" the first 4 guys, he wouldn't have to do it himself .. but he might be vindictive enough to entice 7, 8, and 9 to drop that group and come socialize with him. then the other 6 don't even have enough to buy a beer to share among themselves!

the point of the "story" is that folks don't always think thru their actions and the repercussions .. especially when they think they're "entitled". whether the story goes as originally told or as you describe, the first 4 guys are out a meal ticket 'cause the other guys that have been paying probably see what's in store for them if they don't pay up and they'll check out too!

just think about what you'd do after #10 got beat up if you were #9.