Posted on 02/23/2008 9:21:47 PM PST by jdm
With both Hillary and Obama promising billions in freebies, who’s going to pay after they kill the Goose that lays the Golden Eggs?
Suppose that every day, ten men go out for beer and the bill for all ten is $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, ladies and gentlemen, 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.
Who is John Galt?
Math+Liberlogic=no beer!!!1!
I think the good Professor has stated on his website that he did not write that artice. I’m not refuting the accuracy, just saying that the purported authorship is questionable.
The first four men (the poorest) must share in the windfall.
They would each be paid $1 to drink while the others pay!
Democrats demand tax windfalls for those not paying taxes!
I love this old analogy.
Democrat Math Just Doesn’t Add Up!
McDole needs to confront Clinton and Obama on their math if he ever wants to be President.
Actually, the fairest thing to do would have been for each man to have paid $10 each for the beer, then after the owner reduced the price, each would now pay $8 each.
btt
See the obvious answer is we should make them all rich.
Then we can tax them all and they all can pay $90 for the beer.
All we got to do is raise the minimum wage. Say $50 bucks an hour, maybe $100, then they can drink good beer.
And of course there comes a point... where the government and the “have nots” realize it is quicker and simpler to seize the assets of the “haves” and send them into slave labor rather than beat around the bush.
LOL
Good analogy to pass along.
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.