Wake 101
Home   Articles   Pics/Video   Gear   Wake 101   Events   Community   Forums   Classifieds   Contests   Shop   Search
WakeWorld Home
Email Password
Go Back   WakeWorld > Non-Wakeboarding Discussion

Thread Tools Display Modes
Prev Previous Post   Next Post Next
Old     (grant_west)      Join Date: Jun 2005       11-28-2012, 8:32 AM Reply   
In a nut shell, The 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



> The first four men (the poorest) would pay nothing.

> The fifth would pay $1.

> The sixth would pay $3.

> The seventh would pay

> 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? The paying customers?

> How could they divide the $20 windfall so that everyone would get his fair



> 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 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)..


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



> "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


> "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.


> David R. Kamerschen,


> Professor of Economics.


> For those who understand, no explanation is needed.

> For those who do not understand, no explanation is possible.


> P.S. ~ And, who has ever found a job from a poor person? ~ or one who is

afraid to take the
huge risk?!


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

All times are GMT -7. The time now is 10:22 PM.

Home   Articles   Pics/Video   Gear   Wake 101   Events   Community   Forums   Classifieds   Contests   Shop   Search
Wake World Home


© 2012 eWake, Inc.    
Advertise    |    Contact    |    Terms of Use    |    Privacy Policy    |    Report Abuse    |    Conduct    |    About Us