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| Name: |
Nutin Bitein
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| Subject: |
Taxes explained
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Date:
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3/13/2008 2:26:07 PM
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> FOR THOSE WHO ARE "ALL EARS", THIS ONE COMES CLOSE TO EXPLAINING WHY WE
> BECOME REPUBLICANS (Compliments of: David R. Kamerschen, Ph.D.,
> Professor
> of Economics, University of Georgia).
> Our Tax System Explained: Bar Stool Economics
> 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 s o 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 were 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 t oo 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
>
>
>
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| Name: |
CAT BOAT
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| Subject: |
Taxes explained
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Date:
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3/14/2008 8:52:28 AM
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Good reading. I like that explaination plain and simple.
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