Free Republic Browse · Search General/Chat Topics · Post Article

BAR STOOL ECONOMICS
unknown | unknown

Posted on 10/09/2012 12:50:15 PM PDT by betty boop

BAR STOOL ECONOMICS

Suppose that every day, ten men go out for a 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 \$1.00

The sixth would pay \$3.00

The seventh would pay \$7.00

The eighth would pay \$12.00

The ninth would pay \$18.00

The tenth man (the richest) would pay \$59.00

So that’s what they decided to do. The 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 \$20.00."

Drinks for the ten men now cost just \$80.00.

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 their “fair share?” They realized that \$20.00 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 paid \$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, 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.

For those who understand, no explanation is needed.

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

KEYWORDS: economics; richvpoor; socialisteconomics; taxreform; zerosumgame
A little "math lesson" that sheds light on vast issues now confronting our nation. Enjoy!
1 posted on 10/09/2012 12:50:19 PM PDT by betty boop

To: betty boop

2 posted on 10/09/2012 1:02:23 PM PDT by nolongerademocrat ("Before you ask G-d for something, first thank G-d for what you already have." B'rachot 30b)

To: betty boop

That’s not how the system works. You have to add in multi million dollar corporations with paid lobbists which do not pay one dollar but enjoy the benefits. I pay more taxes than GE.

3 posted on 10/09/2012 1:04:00 PM PDT by Citizen Tom Paine (An old sailor sends)

To: betty boop

Bar stool economics in deer season.

4 posted on 10/09/2012 1:04:03 PM PDT by RingerSIX (My wife and I took an AIDS vaccine that they offer down at our Church.)

To: betty boop

Democrats understand. They want to destroy everyone’s ability to freely make his financial decisions.

5 posted on 10/09/2012 1:05:13 PM PDT by I want the USA back (Liberalism is due to a breakdown of the thinking apparatus.)

To: betty boop

I’ve seen this before but it’s still true and needs repeating. Maybe “Mittens” will use it in the next debate. Along with asking “Won” how “Mooch-elle” plans to decorate that little beach cottage.

6 posted on 10/09/2012 1:05:41 PM PDT by fella ("As it was before Noah, so shall it be again,)

To: Citizen Tom Paine
That’s not how the system works. You have to add in multi million dollar corporations with paid lobbists which do not pay one dollar but enjoy the benefits. I pay more taxes than GE.

No corporation pays taxes.

They collect taxes from their customers.

Why ask GE to collect taxes for the government? If the government wants more money from the citizens, let the government collect it.

7 posted on 10/09/2012 1:09:37 PM PDT by dead (It ain't over until the phone lady sings.)

To: betty boop

The first 5 freeloaders should be hit over the head with the empty beer bottles of the bottom 5 who can at least afford a beer.

Losers

They shouldn’t be in the bar in the first place. Get a job or pick up some empty bottles by the side of the road and cash them in for some money to get a beer.

8 posted on 10/09/2012 1:16:17 PM PDT by PGalt

To: betty boop

Seen this before? (That’s OK. A little repetition doesn’t hurt).

9 posted on 10/09/2012 1:21:00 PM PDT by YHAOS (you betcha!)

To: RingerSIX

The buck stops here.

10 posted on 10/09/2012 1:28:22 PM PDT by Lysander (vices are not crimes.)

To: Citizen Tom Paine; betty boop
"I pay more taxes than GE."

No one pays taxes but some of the end-users. Boop's explanation simply describes how the collection system works.

11 posted on 10/09/2012 1:28:22 PM PDT by YHAOS (you betcha!)

To: betty boop

Excellent, been using this example for a while now.
Also ‘like’ the one about the stranger coming into town and leaving \$1000.00 with the hotel manager and the towns ‘debt’ (well a smallish inner circle) being cleared, with the stranger leaving with his ‘original’ grand.

12 posted on 10/09/2012 1:43:59 PM PDT by xrmusn (6/98 "It is virtually impossible to clean the pond as long as the pigs are still crapping in it")

To: betty boop

Back in the late 60’s or there about, the State of California had a surplus (times do change) and the legislature was trying to decide how to refund it to the population. After a lot of wrangling, it was decided to refund all tax payers \$100. The people went crazy, my brother-in-law included. Why should the rich get the same amount as me. They do not need it and BTW they are already rich.

No one got a tax rebate. The money was spent on other programs

13 posted on 10/09/2012 2:01:14 PM PDT by dirtymac (Now is the time for all good men to come to the aid of their country. Really NOW!!!!)

To: betty boop

Seen many times but it’s always fun to review. Also the averaging of class grades so that everyone gets equal results on tests is a good one. No one fails but no one gets a top score either. Soon the grades become lower and lower until they’re all nearly failing as incentives to do well is taken away.

14 posted on 10/09/2012 3:39:54 PM PDT by Joan Kerrey

To: betty boop

I’ve always had a theory on barstool freedom of speech.

15 posted on 10/09/2012 3:44:17 PM PDT by Lurkina.n.Learnin (Ignorance is bliss- I'm stoked)

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

 Free Republic Browse · Search General/Chat Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794