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Bar Stool Economics (Fun Satire)
email | ? | David R. Kamerschen, Ph.D.

Posted on 06/11/2012 6:25:50 AM PDT by Conservaliberty

Our Tax System - Simplified

Bar Stool Economics:

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 did!' '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, or 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.

NObama, keep the change !


TOPICS: Political Humor/Cartoons; Your Opinion/Questions
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I got this in an email from my father in law. I'm sure it's made the rounds before but it makes for a good chuckle.
1 posted on 06/11/2012 6:25:51 AM PDT by Conservaliberty
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To: Conservaliberty

Too bad they don’t teach this in schools. They teach the opposite that the rich get richer and poor get poorer and the tax system exploits the poor to help the rich. Messed up.


2 posted on 06/11/2012 6:36:52 AM PDT by An American! (Proud To Be An American!)
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To: An American!

The problem is when both sides (are) right.

When both sides are right, one side pays lower taxes by sending production to cheaper offshore sites, meanwhile the other side pays lower taxes on what they get from the government because their jobs are gone.

Thing is, we’re really really close, to more than half being on the government giveaways.

Once we cross that path, there will be no turning around.

We need to start turning that path right now.

Right here.

Now.


3 posted on 06/11/2012 6:43:03 AM PDT by Cringing Negativism Network (America doesn't need any new laws. America needs freedom!)
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To: Conservaliberty

The bar owner lost his business and people are unemployed because where there were ten there are now nine. The nine killed the goose that allowed the bar owner a business, people to be employed, and four (then five) to drink for free. Reminds one of the mindset of those who call themselves the 99 percent.


4 posted on 06/11/2012 6:46:35 AM PDT by no-to-illegals (Please God, Protect and Bless Our Men and Women in Uniform with Victory. Amen.)
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To: Conservaliberty

Jerry Brown saw this and said that if you make the guy paying $59 pay four more bucks, you’ll have enough votes to be in office forever.


5 posted on 06/11/2012 6:49:21 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: Conservaliberty
You live next door to thieves. They steal from you every day while you are at work.

Do you continue to live next door to them, or move so they cant rob you daily?

It really is as simple as that.

6 posted on 06/11/2012 6:52:31 AM PDT by rawcatslyentist ("Behold, I am against you, O arrogant one," Jeremiah 50:31)
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To: Conservaliberty

Soon to be read on-air by talk radio hosts everywhere.


7 posted on 06/11/2012 7:05:23 AM PDT by Last Dakotan
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To: Conservaliberty

David Kamerschen is not the author of this.

http://davidk.myweb.uga.edu/


8 posted on 06/11/2012 7:46:22 AM PDT by stormer
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To: Conservaliberty

This is the real truth to this story: “For those who do not understand, no explanation is possible.”


9 posted on 06/11/2012 8:15:08 AM PDT by falcon99
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To: stormer

Sorry! I just posted the email that I received, it said he was the author. My mistake...


10 posted on 06/11/2012 5:52:31 PM PDT by Conservaliberty (25 and conservative. I guess I have no heart, Oh, well, makes shooting the bad guys easier.)
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