Our Elementary Tax System at its core...

I received this in an email from a college buddy and thought it was good fun...Thanks, Squatty!

But interestingly enough it ties in with my previous entry of the Exit Tax that seems to be getting so much attention.

The other interesting thing to take note is that, although there is some truth to this riddle, the taxes savings distributions have no relation, in this story, to each person relative of income. This is where a flat tax might be in line for a more fair breakdown. At least then it is all relative to income.

I will also add that where I reside I am already paying what the seventh and eighth men are paying for a drink without having a friend with me. So this economics wouldn't add up no matter how you slice it...

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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 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.

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 did!", "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, boys and girls, 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, or 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.


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

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I am a fan of the assistance programs like Social Security and Medicare. However, upon which we allowed our government to borrow from these funds in order to fraudulently state that they have balanced a budget this system has been doomed for failure. That is simple economics that the poor who need those payments have been coming out of pocket for those many years of admnistrations borrowing from those funds. Now, using those funds that are earmarked (ooooh, there is that word) for the aged and needy, based on relative income, we can see just how topside friendly this tax system can be.

And the McCant campaign thinks they can balance the budget without raising taxes...Perhaps the public will need to know where their funds will be coming from.

I know Alaska has a bit of an influx of funds that might be able to be used! (no offense to the Alaskan taxpayer...)