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Thread: tax system 101

  1. #1
    RK.'s Avatar
    RK.
    RK. is offline Ring of Fame Rally Cross II Champion
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    tax system 101

    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.

    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.

    WWBGD

  2. #2
    BloodyHorns82's Avatar
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    Re: tax system 101

    So according to this, the wealthiest 10% of americans accomodate for 59% of the total tax burden.

  3. #3
    PacNWVike's Avatar
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    Re: tax system 101

    It's actually much higher than that...
    something like the top 5% pay most of it.
    Singer should be able to dig that stat out from the net.
    "All that is necessary for the triumph of evil is that good men do nothing."
    Edmund Burke

  4. #4
    PacNWVike's Avatar
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    Re: tax system 101

    Here is the answer:

    http://usgovinfo.about.com/od/incometaxandtheirs/a/whopaysmost.htm

    "The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.

    The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.

    The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent."

    There are a whole lot of folks out there who pay nothing.
    "All that is necessary for the triumph of evil is that good men do nothing."
    Edmund Burke

  5. #5
    BloodyHorns82's Avatar
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    Re: tax system 101

    So many people whine that the rich pay virtually nothing.
    I always thought that seemed sketchy.
    Selfishly, I'm glad to hear they pay almost all of it.
    Doesn't hardly seem fair though.

  6. #6
    BadlandsVikings's Avatar
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    Re: tax system 101

    I'm converting to Amish so i don't have to pay taxes

  7. #7
    VikingMike's Avatar
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    Re: tax system 101

    "BadlandsViking" wrote:
    I'm converting to Amish so i don't have to pay taxes

    But then you wouldn't have electricity or a phone. ;D
    Any man who afflicts the human race with ideas must be prepared to see them misunderstood. - H.L. Mencken

    Come from the land of the ice and snow...

  8. #8
    singersp's Avatar
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    Re: tax system 101

    "PacNWVike" wrote:
    It's actually much higher than that...
    something like the top 5% pay most of it.
    Singer should be able to dig that stat out from the net.
    Singer could do that, but it doesn't involve the Vikings, trashing the Pack, babes or cheerleaders, so I'll leave that up to the CPA's & accountants of PP.O.

    "If at first you don't succeed, parachuting is not for you"

  9. #9
    BadlandsVikings's Avatar
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    Re: tax system 101

    "VikingMike" wrote:
    "BadlandsViking" wrote:
    I'm converting to Amish so i don't have to pay taxes

    But then you wouldn't have electricity or a phone. ;D
    I don't have any of that now

  10. #10
    dcboardr41 is offline Team Alumni
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    Re: tax system 101

    "BadlandsViking" wrote:
    "VikingMike" wrote:
    "BadlandsViking" wrote:
    I'm converting to Amish so i don't have to pay taxes

    But then you wouldn't have electricity or a phone. ;D
    I don't have any of that now
    you wouldnt have PPO
    :'(

    Pissing on the Pack since 08'

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