U.S. Taxes - How True It Is

  • Thread starter AnAmericanCitizen
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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 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.




If the rich are paying all the taxes , why don't we end taxes on
wages ?
When the rich are sucking 10,000 times the money out of the
economy wage earners earned for them, they are the ones who benefit
the most.
The fallacy in you line of bullshit is the fact that all of the
people don't benefit by the same amount.

Now if you had said the richest guy got ten thousand kegs while
the poorest guys only got a shot glass full would you still think it
would be fair for them to share an equal part in the bill?
That doesn't correlate to the original hypothosis in the least.....AAC




Your analogy is flawed. Those with more money utilize more of the
infrastructure, paid with tax dollars, than those who make less. The
top ten percent have more access to politicians.

Also, if you check David R. Kamerschen's website, you'll find that he
denies having written the above beer nonsense.
Thanks for pointing this out as reading up on it at Scopes points out that many
professors of accounting, even a taxpayer column in the Chicago Trib, have used this
parable in their classes... William F. Buckley used it in the National Review. All
of which just gives further credence to it....AAC

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