Barstool Economics This is Great

[ShamGlock]

Ten men go out for beer. 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. He said, "Since you are all such good customers, 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 $2 ? 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 any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D. Professor of Economics, University of Georgia

[Guest db99wj]

I'm going to be copy and pasting this...kthxbye.

Very good!

[USMCJG]

That is an excellent analogy. Thanks for posting it.

[Mike.357]

the libs who are in charge of things would never understand that. or worse yet would surely be on the side of the first 6 people in that scenario and see nothing wrong with beating up the tenth man. And of course be baffled by his not coming for beers anymore.

[TNFF319]

Wow. That explains it about easy as I could imagine, but people still won't get it.

[NextExit]

I love it!! Thanks for posting! Gonna send this to a liberal friend of mine...

[Guest Glock23ForMe]

Nice... That makes a lot of sense...

[gregintenn]

Should be taught in all High School economics classes.

[mcurrier]

Very good analogy!

Delivered to a section-8 home/condo this past friday, had to carry delivery inside and upstairs. Nice hardwood floors. Saw 4 tv's (one was a flat screen) and a laptop. Resident was talking on a cell phone. What's wrong with this picture?

[Hgunner]

Sociaslism is great until you run out of other peoples money.

[ShamGlock]

Yeah, I thought this was a really great break down of our tax structure and the mentality of many around it.

[Guest Orionsic]

+2 Points!

[Guest mustangdave]

very well done....

[gnmwilliams]

Woulda ended differently if the tenth guy had his HCP.

[Magiccarpetrides]

Great read...I forwarded this to my accountant...hes of the same mind as most of us