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  1. #1
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    Barroom 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 bi ll 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 wh en 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.


    Contrary to Internet folklore, Dr. Kamerschen is NOT the author of "Tax Cuts: A Simple Lesson in Economics" or “Bar Stool Economics” or anything similar to that. Additionally, he does NOT know who wrote it and he has no opinion on its merits.

  2. #2
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    Re: Barroom Economics

    Those damn selfish poor people.


    I have a few that could be offered in rebuttal but the thread would just get locked anyway.

  3. #3
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    Re: Barroom Economics

    "Bkfldviking" wrote:

    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
    One could agree, one could disagree, at least this is a good example that everybody understands.
    Good read
    Rosie O'Donnell is a dude!

  4. #4
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    Re: Barroom Economics

    I wouldn't post clearly conservative chain e-mails on here, especially considering our "no politics" rule.
    Dr. Kamerschen of the University of Georgia DID NOT write this and has refuted writing this many times.

    I would like to add that according to this little bar room economic model, 40% of our population is in poverty. In reality, there would only be 1 guy paying nothing at the table and those other 3 guys who were paying nothing would be pushed into the "middle class" area.

    I think this is a little too simplistic of a way to put it but it's the kind of thing that gets people all fired up in chain mail and on message boards.

    Locked in... 8 posts


  5. #5
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    Re: Barroom Economics

    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D

  6. #6
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    Re: Barroom Economics

    "UffDaVikes" wrote:
    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D
    Yeah, its terrible that a business owner gets any reward for sticking his neck out with all his finances, putting up with all the shit, and providing jobs for people.


    What dicks.

    BTW, BLK, the first post there is brilliant in its simplicity if not 100% right.
    Its close enough to illustrate reality that most people don't want to cop to, or will spin some other magic way to put rainbows and sunshine on it about why another handout to those without is your duty.

    In closing, this will likely get locked if it becomes a political debate instead of an economic debate.

    Hell, I guess its unlikely folks can separate the two given the ridiculous political climate this year.

  7. #7
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    Re: Barroom Economics

    "Webby" wrote:
    "UffDaVikes" wrote:
    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D
    Yeah, its terrible that a business owner gets any reward for sticking his neck out with all his finances, putting up with all the shit, and providing jobs for people.



    What dicks.

    BTW, BLK, the first post there is brilliant in its simplicity if not 100% right.
    Its close enough to illustrate reality that most people don't want to cop to, or will spin some other magic way to put rainbows and sunshine on it about why another handout to those without is your duty.

    In closing, this will likely get locked if it becomes a political debate instead of an economic debate.

    Hell, I guess its unlikely folks can separate the two given the ridiculous political climate this year.
    Hey, I own my business so yes, that response had lots of holes in it but so did the first one, which was the point.

    I know that when I drive to a bar in another town that I am doing it in a vehicle whose cost is deducted from my income, which lowers my taxes compared to when I was an employee and paid for the car from my net income. I can also go the route of using the mileage as a tax deduction and can write off the drinks as an entertainment expense for my business etc.
    I am sure the richest guy did the same thing in the story above. I can also deduct my work clothes, my tools, equipment etc. That is just a fact of life.

    Instead of all of this class warfare economic talk we should just abandon the payroll taxes, social security deductions, workers comp insurance etc and go to a single consumption based sales tax instead. that would keep the jobs from being sent overseas and eliminate the IRS, Accountants and put everybody in the same tax bracket.

  8. #8
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    Re: Barroom Economics

    "Webby" wrote:
    "UffDaVikes" wrote:
    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D
    Yeah, its terrible that a business owner gets any reward for sticking his neck out with all his finances, putting up with all the pooh, and providing jobs for people.



    What whoopdeedoos.

    BTW, BLK, the first post there is brilliant in its simplicity if not 100% right.
    Its close enough to illustrate reality that most people don't want to cop to, or will spin some other magic way to put rainbows and sunshine on it about why another handout to those without is your duty.

    In closing, this will likely get locked if it becomes a political debate instead of an economic debate.

    Hell, I guess its unlikely folks can separate the two given the ridiculous political climate this year.
    Sorry about that, I just thought it was amusing and wanted to share a smile or two.
    Just underestimated some peoples sesetivity.

  9. #9
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    Re: Barroom Economics

    "UffDaVikes" wrote:
    "Webby" wrote:
    "UffDaVikes" wrote:
    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D
    Yeah, its terrible that a business owner gets any reward for sticking his neck out with all his finances, putting up with all the pooh, and providing jobs for people.



    What whoopdeedoos.

    BTW, BLK, the first post there is brilliant in its simplicity if not 100% right.
    Its close enough to illustrate reality that most people don't want to cop to, or will spin some other magic way to put rainbows and sunshine on it about why another handout to those without is your duty.

    In closing, this will likely get locked if it becomes a political debate instead of an economic debate.

    Hell, I guess its unlikely folks can separate the two given the ridiculous political climate this year.
    Hey, I own my business so yes, that response had lots of holes in it but so did the first one, which was the point.

    I know that when I drive to a bar in another town that I am doing it in a vehicle whose cost is deducted from my income, which lowers my taxes compared to when I was an employee and paid for the car from my net income. I can also go the route of using the mileage as a tax deduction and can write off the drinks as an entertainment expense for my business etc.
    I am sure the richest guy did the same thing in the story above. I can also deduct my work clothes, my tools, equipment etc. That is just a fact of life.

    Instead of all of this class warfare economic talk we should just abandon the payroll taxes, social security deductions, workers comp insurance etc and go to a single consumption based sales tax instead. that would keep the jobs from being sent overseas and eliminate the IRS, Accountants and put everybody in the same tax bracket.
    Then you and I both are in the same boat.
    Its fricken brutal owning a company these days.

    I can't disagree with you on the consumption based taxes.
    Would make my life a hell of a lot easier so I can concentrate on doing what we do best.
    Bah, I am just going to get riled up about employees and taxes and health blah blah blah blah blah .....

    LOL

  10. #10
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    Re: Barroom Economics

    "Webby" wrote:
    "UffDaVikes" wrote:
    "Webby" wrote:
    "UffDaVikes" wrote:
    He forgot to attach the last chapter:



    Camera pulls back from the patrons consuming alcohol at the table and rewinds to the whole bar. It just so happens the ten drinkers worked in the bar.

    The tenth drinker, the owner of the restaurant, is sitting on his backside telling the head bartender to make the servers work faster. Each time a customer pays their $100 bill, the owner takes $67 and gives the remaining $33 to the servers.

    One day the owner gets peeved off at something and disappears, never to be seen again. The nine servers, look at each other, shrug, then carry on working as before. When the next customer pays their $100 bill, they wonder what to do with the $67 which the owner used to take. They decide to split it equally.

    It turns out that with this $67 the nine diners could afford to buy the drinks after all.

    That, boys and girls, journalists and college professors, is how fat cats leach off those around them without contributing anything useful to society.
    There, that's better ;D
    Yeah, its terrible that a business owner gets any reward for sticking his neck out with all his finances, putting up with all the pooh, and providing jobs for people.



    What whoopdeedoos.

    BTW, BLK, the first post there is brilliant in its simplicity if not 100% right.
    Its close enough to illustrate reality that most people don't want to cop to, or will spin some other magic way to put rainbows and sunshine on it about why another handout to those without is your duty.

    In closing, this will likely get locked if it becomes a political debate instead of an economic debate.

    Hell, I guess its unlikely folks can separate the two given the ridiculous political climate this year.
    Hey, I own my business so yes, that response had lots of holes in it but so did the first one, which was the point.

    I know that when I drive to a bar in another town that I am doing it in a vehicle whose cost is deducted from my income, which lowers my taxes compared to when I was an employee and paid for the car from my net income. I can also go the route of using the mileage as a tax deduction and can write off the drinks as an entertainment expense for my business etc.
    I am sure the richest guy did the same thing in the story above. I can also deduct my work clothes, my tools, equipment etc. That is just a fact of life.

    Instead of all of this class warfare economic talk we should just abandon the payroll taxes, social security deductions, workers comp insurance etc and go to a single consumption based sales tax instead. that would keep the jobs from being sent overseas and eliminate the IRS, Accountants and put everybody in the same tax bracket.
    Then you and I both are in the same boat.

    Its fricken brutal owning a company these days.

    I can't disagree with you on the consumption based taxes.

    Would make my life a hell of a lot easier so I can concentrate on doing what we do best.

    Bah, I am just going to get riled up about employees and taxes and health blah blah blah blah blah .....

    LOL
    I know where you are coming from. And it is hard to find good employees too who are committed to helping the business be profitable so that we can pay them more. And there is no reason to pay people not to work when there is so much work that needs to be done in this country.


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