Our Tax System Explained!

[Woolly Bugger]

Our  Tax System Explained:

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 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 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 rea  liz ed 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 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!'

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, ladies and 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.


David R. Kamerschen,  Ph.D.
Professor of Economics
University of  Georgia

[troutphisher]

Thats a pretty good analogy, put it a simple narrative.

Obama's plan would increase the tenth guys beer $69.......


Ya, I would find another place to drink too.

[overbrook]

Holy shit Woolybugger ! that is the most intelligent breakdown of the tax code I have ever read or heard....I've tried to explain this in my own words....but never came close to driving it home that well! Kudos Sir!!  ;hb    I think the part that really drives the point home is what happens when that "rich asshole" does'nt come around anymore!  Best post I've seen in a hell of a long time!  0--0