Tax System Explained in Beer

[Fryguy]

Tax System Explained in Beer.



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.


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"You know how I know it's business time...because it's Wednesday."

[feelnjstfine]

Fryguy, good stuff man.

[taku]

I saw that the other day, and what makes me mad is that the people at the top who make the most... they will never talk about their tax loop holes... sure on PAPER they might pay the highest interest rate.. even though they are also the ones that can totally afford it. But on paper they might pay 44% tax... but then they have their accountant/tax guy/lawyers find 500 loopholes and they end up paying the same tax and you or me or in some cases, just barely more than you or me.

FVCK THEM! The top 5% are the ones who will suffer the least pain when forced to pay it.. you or me on the other hand..the middle class.. we won't have social security when we retire.. and because of that we'll have to keep working even when we're old in order to be able to send the kids to college or have boats or enjoy simple relatively inexpensive pleasures in life thanks to bulljive taxing.

Anyways, I gotta stop talking about this crap, makes me mad :p And it's also why I like Obama, his tax plan will actually help middle class and not kill us even more.

[POPTART]

but when the company you work for has to pay more out the are going to make cuts and i hope it dosent effect your job, or salary

[taku]

I'm not talking about corporations, I'm talking about individuals. My company already announced next years insurance is going to be astronomically higher. Even though it's been higher the past 2 years as it is.