Bar Stool Economics

bellwells

Pretty simple explanation of our tax system and what happens when one tinkers with it:

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!"

"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, 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.

solo

Stupid analogy. (unless you are posting from a right wingnut propaganda email)

10 men drinking together as friends? then they would split the bill and the tip.
If in Dallas, Texas with a $100 bill then add 8.25% taxes and about 20% tip = $129.72 or $13 each.

If anyone could not afford to pay, then they cannot afford to drink and will not be invited, unless the invitee agrees to pay their share.

At least one thing about the analogy is correct ... beer can trickle, but the neocon fiscal plan cannot.

In reality, the rich guys will drink in their cigar and bourbon bar, the middle class guys are at a sports bars and the poor guys are drinking at home or in their nieghbors garage.... this is America, there is very obvious class distinctions and discrimination.

bellwells

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

EDIT: You did understand this was an allegory about paying taxes, didn't you? From your response, I wonder.