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Rick-Mi
08-04-2008, 01:40 PM
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

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

Tylerdurden
08-04-2008, 01:47 PM
You left out the part where the poor mans kid got blown up in Iraq because there was no jobs but the rich mans kid is studying in Paris.

There are benefits.

George Roberts
08-04-2008, 02:24 PM
Where I come from the tenth man would always choose to pay 100%.

Paul Pless
08-04-2008, 02:51 PM
According to Kamerschen's webpage:
Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it.Thought you might like to know.

Rick-Mi
08-04-2008, 03:07 PM
According to Kamerschen's webpage:
Quote:
Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it.

According to Kamerschen's webpage:Thought you might like to know.

So what? Does that change the relevancy of the point? However, you might be interested in a little tidbit. While reading the story I encountered a factual error. Some of the four really do get paid to drink beer because of something called the "eaned income credit" which actually pays tax refunds to people who don't pay any income tax at all.....

Tylerdurden
08-04-2008, 03:12 PM
You left out so many things the little guys still has to pay taxes on.

It just to juvenile.

Cuyahoga Chuck
08-04-2008, 04:17 PM
According to Kamerschen's webpage:
Quote:
Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it.

So what? Does that change the relevancy of the point? However, you might be interested in a little tidbit. While reading the story I encountered a factual error. Some of the four really do get paid to drink beer because of something called the "eaned income credit" which actually pays tax refunds to people who don't pay any income tax at all.....

Is there a lesson in trickle-down economics in there somewhere? I thought that stuff went to the grave with Ronnie Reagen.
The idea of a rich guy drinking beer with the peasants instead of sipping chablis with his peers at the country club where he could get good tips on how to reduce his tax liability or the name of a big time lobbyist who could engineer some favorable legislation suggests the author of this tale hasn't had enough life experiences to tell a realistic story.
The best storyteller in America is Garrison Kiellor. Got anything by him? Of course he is a LIBERAL.

seanz
08-04-2008, 04:32 PM
Free Beer!
:)

Are we sure this is about taxes?
I thought it was a cautionary tale about how alcohol use leads to violence and destroys relationships.
Oh well............

John of Phoenix
08-04-2008, 04:34 PM
According to Kamerschen's webpage:
Quote:
Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics." Additionally, he does NOT know who wrote it.
Thought you might like to know.
You'd think the relevance of that would have SOME impact, but when dogma is the name of the game...

08-04-2008, 05:15 PM
Uh...John...izzint that Dogmatix....

seanz
08-04-2008, 06:07 PM
Uh...John...izzint that Dogmatix....

http://www.asterix.co.nz/take_a_look/dogmatixbooks/dogmatix.jpg

Dogmatix....the Bilge mascot.

Rick-Mi
08-04-2008, 06:16 PM
I don't know who wrote the post script, but whoever it was hit the nail squarely on the head too:

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

.

seanz
08-04-2008, 06:21 PM
That just goes against Rule #17...you only truly understand something when you can explain it to someone that has no clue.

Rick-Mi
08-04-2008, 06:32 PM
That just goes against Rule #17...you only truly understand something when you can explain it to someone that has no clue.

You have a point, but first that person must have enough of an open mind to at least internalize the rationale, much less come to a logical conclusion.....

botebum
08-04-2008, 08:03 PM
Where I drink we all pay for our own beer(unless it's someone's birthday). We all drink the same size beer. We all drink the same price beer. We all drink the same amount of beer. We all eat free peanuts.
I live in a perfect world. Right up to the point where I leave the bar.
I have to get home 15 miles away. Another guy has to get home 2 miles away. The third guy(I only have two friends) lives around the corner. I can't drive so I have to call my wife to come get me and she's a PITA when I've been drinking. The second guy decides to risk it and gets popped on the way home and it costs him \$5000, 60 days in jail and his license. The third guy trips and falls on the way out of the bar and sues the owner. He wins and now owns the bar. I now live above the bar, the second guy lives across the hall. We carry the third guy home after drinks. We now all drink for free.
See how everything always just works itself out for the best? Quitcherbitchin'.

Doug

seanz
08-04-2008, 08:10 PM
Welcome to the Serendipity Bar & Bistro.........

Cuyahoga Chuck
08-04-2008, 08:10 PM
You have a point, but first that person must have enough of an open mind to at least internalize the rationale, much less come to a logical conclusion.....

Every vacuum cleaner saleman hopes to find rubes who have an
"open mind".

hansp77
08-04-2008, 09:18 PM
I've really gotta find me one of these rich fella's who will pay his own tax and then share with me all his after-tax profits. I promise- no matter how drunk I get I still won't beat him up:rolleyes:

Where I come from the rich and poor, when they drink together, buy their own drinks.

What was the point of all this?

Alexander2
08-04-2008, 09:28 PM
I looked the author up also. I thought it was too stupid even for an economist to write.

Please explain the flaws that you think make it stupid.

mdh
08-04-2008, 10:04 PM
It's a very accurate assessment of how the tab gets split up but the underlying assumption - that all the beers are the same size - is incorrect.

If this analogy were to be fully carried through you'd have to have the bartender tell us what size the beers were.

I haven't bothered to do the math but it would go something like this:
the first four patrons each had a shot glass of beer
patrons five through eight would have from two to five shots of beer each
patron nine might manage to have a frosted pint
patron ten would have a keg
makes sense that he wants to pay only 60% of the tab!

Exactly wrong. This analogy was to describe the system of taxation, not wealth. If you can follow the logic, they are not buying beer, they are driving on the same roads, being protected by the same police, and defended by the same army, for varying amounts of money.

Cuyahoga Chuck
08-04-2008, 10:50 PM
Exactly wrong. This analogy was to describe the system of taxation, not wealth. If you can follow the logic, they are not buying beer, they are driving on the same roads, being protected by the same police, and defended by the same army, for varying amounts of money.

OH!
Why didn't somebody say that?
Unequal taxation stems from the fact that Mr. Ritchie Rich has a lot more to protect and his businesses use more of the nation's assets and infrastucture.
In time of war Mr. Ritchie Rich's corporation can't be forced to face the enemy even tho' it is endangered just as human citizens are. In fact, Mr. Ritchie Rich's corporation may come out of the war with a pocket full of profits from military contracts which have guaranteed profits.

jerryrichter
08-04-2008, 11:05 PM
A cute exercise in math and economics but unfortunately it leaves out the moral dimension of taxation in a democratic society. We are not really talking about beer, we are talking about food, health care, and education to name a few necessary elements of a functioning society. The moral element, which was widely accepted until the Reagan years and later, is the imperative that those who are stronger are morally obliged to assist those who are weaker. Even if in a minority of cases that weakness is their own fault.

Jerry Richter

mdh
08-05-2008, 12:18 AM
A cute exercise in math and economics but unfortunately it leaves out the moral dimension of taxation in a democratic society. We are not really talking about beer, we are talking about food, health care, and education to name a few necessary elements of a functioning society. The moral element, which was widely accepted until the Reagan years and later, is the imperative that those who are stronger are morally obliged to assist those who are weaker. Even if in a minority of cases that weakness is their own fault.

Jerry Richter

Also a cute exercise in rhetoric. As it is now, since Reagan and every President since, the poor don't pay FIT. Some even get paid to be here. How damn much should you pay somebody to piddle ass around all year?

The Bigfella
08-05-2008, 12:53 AM
Unequal taxation stems from the fact that Mr. Ritchie Rich has a lot more to protect and his businesses use more of the nation's assets and infrastucture.
In time of war Mr. Ritchie Rich's corporation can't be forced to face the enemy even tho' it is endangered just as human citizens are. In fact, Mr. Ritchie Rich's corporation may come out of the war with a pocket full of profits from military contracts which have guaranteed profits.

I think you'll find that Mr Rich has plenty of private protection in place because the publicly provided protection isn't that good. Last time I looked, there were at least two private security people to every sworn police officer. I'd be happy to take a refund of the \$1,500 or so in taxes I pay for so-called police protection. I lost the mirrors off two cars last night. I'll put a third one on the street tonight and see if they want to play again - my rules this time.

You might also find that ownership of corporations is more widely spread than you think too. You also seem to under-estimate the importance of that infrastructure in providing employment for people - or would you rather just assume that jobs will appear?

George Roberts
08-05-2008, 12:02 PM
"no Sir, they are being taxed on INCOME (the beer they've consmed) - they are certainly NOT taxed on the services they receive for their taxes."

A valid question is "What are the services worth to people?"

Certainly the poor get as much or value from the road systems then the rich.

UPS delivers to my house. Freight lines move food from far away to my local store and I drive to the store and buy the food.

Without the roads I would die off as would most of the poor - we simply lack the space to grow enough food for our needs, we lack the skills to produce the items we go out and buy. I not sure what cloth would cost if I had to walk a great distance to obtain either it or the raw materials to make it.

The rich on the other hand have sufficient property to fill their needs by hiring locals to do their processing and what not.

A man with a 200' sail boat could get rich moving goods from one place to another - and only the rich have such boats.

Great argument for taxing the poor. But I prefer to have the poor live a bit better than they would if they paid more taxes.

---

Remove all taxes on people making up to \$70K and let them spend on what they will. Let the rich keep what they can after filling their social obligation.

Joe (SoCal)
08-05-2008, 12:13 PM
UPS delivers to my house. Freight lines move food from far away to my local store and I drive to the store and buy the food.

Does UPS deliver to jail ??? ;)
Soon you wont have to drive anyplace for food, you will have all the boloney sandwiches and grape juice you want. :p

Also don't worry about the poor, you will be living up close and personal with the poor in a state run correctional facility that your previous taxes helped pay for. Report back to us in a couple of years.

Kaa
08-05-2008, 12:25 PM
Joe, you're a big fan of stalking now?

Kaa

Joe (SoCal)
08-05-2008, 12:40 PM
Joe, you're a big fan of stalking now?

Kaa

If by stalking you are talking about threatening phone calls to a forum members home? Or obnoxious packages with entire posts printed out and being sent to ex wives? Or anonymous letters sent to forum members boat club? Or even driving from the hinterlands and waiting at a Newport bar to confront a forum member? All of which and MORE have been done to yours truly. ;)

Or do you mean simply responding to the previous post in a thread ????

Eeeeeek :eek::eek:I responded to your post about my post OMG am I stalking you too ? Or are you stalking me ;)

Kaa
08-05-2008, 12:48 PM
Or do you mean simply responding to the previous post in a thread ????

You know perfectly well what I mean and playing cute-n-dumb isn't going to help..

Kaa

Joe (SoCal)
08-05-2008, 12:49 PM
Stop stalking me :p

hokiefan
08-05-2008, 02:09 PM
Where I drink we all pay for our own beer(unless it's someone's birthday). We all drink the same size beer. We all drink the same price beer. We all drink the same amount of beer. We all eat free peanuts.
I live in a perfect world. Right up to the point where I leave the bar.
I have to get home 15 miles away. Another guy has to get home 2 miles away. The third guy(I only have two friends) lives around the corner. I can't drive so I have to call my wife to come get me and she's a PITA when I've been drinking. The second guy decides to risk it and gets popped on the way home and it costs him \$5000, 60 days in jail and his license. The third guy trips and falls on the way out of the bar and sues the owner. He wins and now owns the bar. I now live above the bar, the second guy lives across the hall. We carry the third guy home after drinks. We now all drink for free.
See how everything always just works itself out for the best? Quitcherbitchin'.

Doug

Pretty funny Doug.

When we first moved to Savannah I played in a tennis league. Our team was out of the local public courts and we were basically young guys starting out in life, working for a living. The league rules said the home team had to provide new tennis balls and a certain amount of beer and soft drinks.

When you played at the public courts the cooler was overflowing and the new balls were there. :)

When you played at the Landings, exclusive gated neighborhood (new money), they managed to "forget" to bring the balls and beer. Imagine that. :mad:

Now, when you played at the Golf Club (old money), they had all their stuff in a row, its just that they had someone deliver it all for them. :D They had the nicest courts too, and those old farts could still play a good game of tennis. :eek:

Cheers,

Bobby

mdh
08-05-2008, 02:09 PM
I wonder if GR and JCSH would be as entertaining on a mat as they are on the forum.

mdh
08-05-2008, 03:25 PM
Aw hell. You guys sounded a lot bigger than that.

John of Phoenix
08-05-2008, 03:47 PM
I love ya like a brother Joe so I'm gonna tell ya - you're outa line.

Be :cool: , delete.

Thom T
08-05-2008, 03:56 PM
Speaking of Beer did anyone notice that Coors earnings posted down 57% today. They better find that rich man in a hurry

Joe (SoCal)
08-05-2008, 04:01 PM
I love ya like a brother Joe so I'm gonna tell ya - you're outa line.

Be :cool: , delete.

OK - I thought it was funny but I will defer to you, for the sake of being :cool:

mdh
08-05-2008, 04:06 PM
Hey, Teet. You didn't tell him which one to delete. Give him another democrat helping hand, out.

John of Phoenix
08-05-2008, 05:05 PM
It's "Tits" but you're a FNG so you wouldn't know that. Joe got it just fine.

Thanks buddy, you're tops.

botebum
08-05-2008, 05:50 PM
Speaking of Beer did anyone notice that Coors earnings posted down 57% today. They better find that rich man in a hurry
I'm out of work. Consumption will return once I get a job. If you're smart you'll buy while it's down. I won't be unemployed forever;)

Doug