Skip to comments.BAR STOOL ECONOMICS
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.So thats 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.
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
Since you are all such good customers," he said, "Im going to reduce the cost of your daily beer by $20.00."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 everybodys 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 mans bill by roughly the same amount, and he proceeded to work out the amounts each should pay!
Drinks for the ten men now cost just $80.00.
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!The nine men surrounded the tenth and beat him up.
Yeah, thats 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 didnt get anything at all. The system exploits the poor!
The next night the tenth man didnt 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 didnt 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.
May I share this with my friends?
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.
Bar stool economics in deer season.
Democrats understand. They want to destroy everyone’s ability to freely make his financial decisions.
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.
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.
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.
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.
Seen this before? (That’s OK. A little repetition doesn’t hurt).
The buck stops here.
No one pays taxes but some of the end-users. Boop's explanation simply describes how the collection system works.
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.
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
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.
I’ve always had a theory on barstool freedom of speech.