Our Tax System Explained In Bar Stool Economics



(For those who understand, no explanation is needed, for those who do not understand,

no explanation is possible.)



Suppose that every day, the same 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 when 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 of you will just cost just $80 now."



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.



So:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth man now paid $2 instead of $3 (33%savings).

The seventh man now pay $5 instead of $7 (28%savings).

The eighth man now paid $9 instead of $12 (25% savings).

The ninth man now paid $14 instead of $18 (22% savings).

The tenth man now paid $49 instead of $59 (16% savings).



Each man was better off than before. Plus, the first four

continued to drink for free.



But once outside the restaurant, the sixth man.

Then he pointed to the tenth man and said "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 got."

"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!"



Then the first nine men surrounded the tenth man 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, ladies gentlemen, 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.

10/26/2008 7:21:30 PM

1

10/26/2008 7:21:57 PM

$2

10/26/2008 7:23:17 PM

yes, an email forward, but from an economics professor.

10/26/2008 7:23:25 PM

yes, but what if they're drinking PBR?

10/26/2008 7:24:31 PM

Quote :

" But once outside the restaurant, the sixth man. Then he pointed to the tenth man and said "but he got $10." "

wat

10/26/2008 7:25:49 PM

can't find the original thread on tww but this is a dupe

10/26/2008 7:25:55 PM

you should lock it anyway then

10/26/2008 7:27:58 PM

Quote :

"The people who pay the highest taxes get the most benefit from a tax reduction. "

In your example, the richest man got the least benefit (percentage wise).

10/26/2008 7:29:27 PM

Wait a minute, when did we get together to beat up the top 10%? Did I miss this or something?

It's an amusing story though, but there are numerous flaws in the analogy.

But if it were accurate, it wouldn't be half as amusing.

[Edited on October 26, 2008 at 7:30 PM. Reason : ]

10/26/2008 7:29:29 PM

He got the most benefit dollar wise. That's why they are pissed.

:carlface:

10/26/2008 7:31:31 PM

tl;dr

10/26/2008 7:33:03 PM

^ believe it or not, i don't know what that means, even though i have seen it hundreds of times.

i always figured it meant something similar to ntlb.

so what is it?

10/26/2008 7:34:40 PM

urban dictionary is your friend.

10/26/2008 7:44:13 PM

TOO LONG; DID NOT READ.

TL;FYMI

TOO LONG; FUCKED YOUR MOM INSTEAD

10/26/2008 7:57:13 PM

that's what's wrong with kids these days.. they don't want to read anything but porn and comic books, and most of the time it's not for the text.

10/26/2008 8:08:13 PM

I don't read TWW for chain emails.

10/26/2008 8:13:15 PM

The real question is... how much for a hand job at this establishment?

10/26/2008 8:13:59 PM

I saw a guy puke at the bar today. How much would he have to pay?

10/26/2008 8:14:24 PM

I know both of the bar tenders where i go...

can i still drink under the table?

10/26/2008 8:17:08 PM

yep

10/26/2008 8:17:48 PM

http://www.latimes.com/news/printedition/front/la-na-wallstreetwives25-2008oct25,0,6851558.story?page=1

[Edited on October 26, 2008 at 8:18 PM. Reason : wtf is gay puke?]

[Edited on October 26, 2008 at 8:19 PM. Reason : oh, guy]

10/26/2008 8:18:07 PM

bttt

10/26/2008 10:52:23 PM

10/26/2008 10:56:00 PM

Quote :

"that's what's wrong with kids these days.. they don't want to read anything but porn and comic books, and most of the time it's not for the text."

As a space saver, I try to keep my literature to just comic porn.

10/26/2008 11:03:19 PM