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Old 02-02-2019, 08:04 AM   #1
Comanchehunter
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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!” “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, 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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Old 02-02-2019, 11:15 AM   #2
xman59
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yep, same thing kinda applies to a 15$ an hour minimum wage,, the owner keeps getting squeezed harder and harder, he has to go up on the price of his product so he can continue to make a living,, so the fool who thinks he got a good deal going to 15$ now gets his hours cut so that his hours and pay actually equals what he was making at 7.50$ but he has more free time at 20 hours a week than he had at 40, so he spends more time doing things that require more money because he has too much time,,, the business man now has a harder time keeping employees at 20 hours than he had at 40, because they think he is being greedy and keeping the 20 hours pay in his pocket and getting richer and richer, but his prices went up and he now has fewer customers because he had no choice to increase wages , so his profit line falls and he cuts back on employees so the product suffers..... and no one gets any benefit except the government who gets more tax money ... but only for awhile... because soon there are more unemployed people needing benefits from the government because they are too lazy to get an education and a real job, so the fewer workers get taxed more... so... they retire to get the government benefits they were paying in for the unemployed to reap thinking someone else can pick up the tab........
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Old 02-02-2019, 11:20 AM   #3
tmstuk
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Soooo Where does the rich guy drink beer now?
Joking. Good read.

Last edited by tmstuk; 02-02-2019 at 11:20 AM. Reason: Hit wrong button
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Old 02-02-2019, 01:10 PM   #4
Russ79
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This is what cracks me up about liberals when they start screaming about how a tax cut is a tax cut for the rich and the idiots that believe them don't understand math. Taxes are based on percentages so an across the board reduction in tax percentage means that the rich get to keep a higher amount of money than folks whose percentage is fewer dollars paid (ie the poor). Anyone that doesn't understand that not only shouldn't be able to run for public office but shouldn't be able to vote. Of course, that's just my opinion...
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Old 02-02-2019, 02:18 PM   #5
Playa
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Quote:
Originally Posted by Russ79 View Post
This is what cracks me up about liberals when they start screaming about how a tax cut is a tax cut for the rich and the idiots that believe them don't understand math. Taxes are based on percentages so an across the board reduction in tax percentage means that the rich get to keep a higher amount of money than folks whose percentage is fewer dollars paid (ie the poor). Anyone that doesn't understand that not only shouldn't be able to run for public office but shouldn't be able to vote. Of course, that's just my opinion...
Well get ready, that Muslim lady from MN wants to push a 90% tax rate on the top 1%.
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Old 02-02-2019, 06:48 PM   #6
Comanchehunter
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Quote:
Originally Posted by Russ79 View Post
This is what cracks me up about liberals when they start screaming about how a tax cut is a tax cut for the rich and the idiots that believe them don't understand math. Taxes are based on percentages so an across the board reduction in tax percentage means that the rich get to keep a higher amount of money than folks whose percentage is fewer dollars paid (ie the poor). Anyone that doesn't understand that not only shouldn't be able to run for public office but shouldn't be able to vote. Of course, that's just my opinion...


That’s why I love this illustration. It breaks down the economic situation into a language that most can understand or identify with. As far as I’m concerned, impossible to argue against but would love to hear why it isn’t true.


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Old 02-02-2019, 11:42 PM   #7
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Stupid facts
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Old 02-03-2019, 12:05 AM   #8
Draco
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England kept raising the tax rate for the Beatles when they were big. It was literally a tax rate just for them. It got up to 97% so the Beatles all moved to other countries and England lost all of the money they got from them.
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Old 02-03-2019, 08:19 AM   #9
Playa
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Originally Posted by Draco View Post
England kept raising the tax rate for the Beatles when they were big. It was literally a tax rate just for them. It got up to 97% so the Beatles all moved to other countries and England lost all of the money they got from them.
I don’t know if what you wrote is true, but if it is then McCartney is dumb @$$. He was an outspoken Obama supporter. Which makes him a financially illiterate liberal that didn’t learn a lesson from the 1st time they tried to take his wealth.

EDIT On 2nd thought he is just a “run of the mill” liberal, they ALL want to use someone else’s money, not theirs. Just like they want to take your guns while they or their security keep theirs

Last edited by Playa; 02-03-2019 at 08:21 AM.
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