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Old 10-08-2008, 09:47 AM
 
Location: Rahway N.J
2,093 posts, read 4,869,418 times
Reputation: 3353

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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 every body'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.
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Old 10-08-2008, 10:42 AM
 
Location: In my playhouse.
1,047 posts, read 2,459,354 times
Reputation: 1717
Brian that is the very best explaination I have heard!! Good job!
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Old 10-08-2008, 11:33 AM
 
Location: lumberton, texas
652 posts, read 2,411,637 times
Reputation: 253
That was great!!!!!
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Old 10-08-2008, 11:41 AM
 
Location: South Bay Native
13,050 posts, read 21,163,651 times
Reputation: 22525
Brian, you knocked that one out of the park - can't rep you so here's my praise - you rock!
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Old 10-08-2008, 12:45 PM
 
Location: West Michigan
12,084 posts, read 33,141,404 times
Reputation: 16733
Good post! Here is my praise and I could rep you as well for it. So true.
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Old 10-08-2008, 12:59 PM
 
Location: Sneads Ferry NC/Randolph NJ/Cape Coral FL
12,928 posts, read 24,057,734 times
Reputation: 10744
Very Good!!!
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Old 10-08-2008, 01:29 PM
 
Location: mass
2,905 posts, read 6,420,331 times
Reputation: 4967
Wow! I love this one!

What a good explanation.

LOL.
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Old 10-09-2008, 06:08 AM
 
Location: Rahway N.J
2,093 posts, read 4,869,418 times
Reputation: 3353
Quote:
Originally Posted by mommytotwo View Post
Wow! I love this one!

What a good explanation.

LOL.

Im glad you all understood it
i guess the ones that did not understand it
did not bother to ask me to explain it
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