Tax system explained in beer

[gruntygiggles]

I have always defended the rich against being too harshly judged on what they pay in taxes and what relief they get, but it is always difficult to explain to people that just see the rich as being greedy and getting all the breaks. Without the rich, the poor would be in a much worse state. I have plenty of issues with the rich, but as for tax...this explains it better than I ever could.


The Tax System Explained in Beer
JANUARY 12, 2012
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 ball. “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 men would 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 ? 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 a h higher percentage the poorer he was, to follow the principle of the
tax system they had been using, and he proceeded to work out the amounts he
suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to
drink for free. But, once outside the bar, the men began to compare their
savings.

“I only got a dollar out of the $20 saving,” 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 benefit than me!”
“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. This new tax 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 their 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 government ministers, is how our
tax system works. The people who already pay the highest taxes will
naturally 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.

Don't forget! The poor still didn't have to pay, Leaving the middle lot with the bill and no way of paying it. Which then left them in debt.
Turns out the rich get richer and the poor still get free beer. Whilst the middle get screwed over big time.

Ste.

Sent from my GT-I9100 using Tapatalk 2

[Fallout]

Good way of explaining it. Time to steal and repost on FB.

Mind you, if I was drinking beer for free and then some money came along, and I didn't get lots of free money and free beer, I would be mighty ****ed off. Totally unfair. It's my right to have everything for free as a British citizen. Now give me your car keys and allow me to have sex with your wife.

Ahhhh justice!

[Sid Squid]

Cheryl, perfectly put.

Seems everyone thinks that there should be more beer - but of course someone else should pay.

Nobody 'got richer' most people got poorer as they paid taxes - whatever their level of income. There's a decision that the populace need to make: high taxes and big state, or lower taxes and small state. Those two are irrevocably linked.

And now we live in a truly global world, so the Laffer Curve tells us they'll just go drink with someone else.

[Bluepete]

I'm ok 'cos I brew my own beer!


Missed the point haven't I.


Pete

[Sid Squid]

Originally Posted by Bluepete

Missed the point haven't I.

L'il bit.

S'OK though as long as your beer is fairly distributed - for free.

[Bluepete]

Collection only Sid!

Pete

Thats a great way of explaining the tax system, I like it!

He missed the bit about giving it to charities to enable them to pay less % tax than most people.

[Shawthing]

The current issue is though that the 10th man is trying to disguise himself as the 8th man by:
1) Transfering his money to his 'charitable' mates.
2) Buying his beer with offshore company money.
3) Pretending he cannot aford it whilst flicking through his swiss bank book and piles of offshore bonds.