jshaver123 0 #1 May 9, 2009 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 h ad 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. what does everyone think??? Quote Share this post Link to post Share on other sites
quade 4 #2 May 9, 2009 I think you'll enjoy Speakers Corner.quade - The World's Most Boring Skydiver Quote Share this post Link to post Share on other sites
christelsabine 1 #3 May 9, 2009 What? dudeist skydiver # 3105 Quote Share this post Link to post Share on other sites
Nataly 38 #4 May 9, 2009 Quote what does everyone think??? I think you're missing too many variables.. The 4 poorest earn nothing. number 5, 6, 7 probably earn minimum wage 8 and 9 are earning "moderate" salaries 10 earns so much it would make your head spin.. 1 - 4 earn / pay 0, or, 100%. 5 - 7 pay about 25% of everything they earn. 8 - 9 pay about 30% of everything they earn. 10 should in theory pay something like 38% but in fact probably can hire excellent lawyers and get away with paying about 22% by squirreling away undeclared earnings.. So in *theory*, the middle man has the lowest amount of disposable income. Especially since 1 - 4 probably earn cash on the side that nobody knows about & therefore can afford satellite TV, just like number 10, who probably works so damn much he doesn't even have time to watch his bigass flat-screen TV!!! Of course, my logic omits a bunch of factors as well, and is therefore just as faulty / biased as the OP!! "There is no problem so bad you can't make it worse." - Chris Hadfield « Sors le martinet et flagelle toi indigne contrôleuse de gestion. » - my boss Quote Share this post Link to post Share on other sites
TomAiello 26 #5 May 9, 2009 Quote10 earns so much it would make your head spin. Can you define that? How much money does it take to make your head spin?-- Tom Aiello Tom@SnakeRiverBASE.com SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
Gawain 0 #6 May 9, 2009 Quote Quote what does everyone think??? I think you're missing too many variables.. The 4 poorest earn nothing. number 5, 6, 7 probably earn minimum wage 8 and 9 are earning "moderate" salaries 10 earns so much it would make your head spin.. 1 - 4 earn / pay 0, or, 100%. 5 - 7 pay about 25% of everything they earn. 8 - 9 pay about 30% of everything they earn. 10 should in theory pay something like 38% but in fact probably can hire excellent lawyers and get away with paying about 22% by squirreling away undeclared earnings.. So in *theory*, the middle man has the lowest amount of disposable income. Especially since 1 - 4 probably earn cash on the side that nobody knows about & therefore can afford satellite TV, just like number 10, who probably works so damn much he doesn't even have time to watch his bigass flat-screen TV!!! Of course, my logic omits a bunch of factors as well, and is therefore just as faulty / biased as the OP!! That's actually not universal though. Not everyone that pays 0% in taxes, makes $0.00. The OP is a simplistic look at the US progressive tax rate, but the breakdown of revenue paid, is correct, regardless. The current top rate is 35%, about to go up to 39.5%.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
jshaver123 0 #7 May 9, 2009 the OP says they drink every day that means 365 times 59 dollars a day he would spend 21,535 dollars a year on beer with his friends...... Yea my original post leaves alot of factors out but its there to make you think... as well.... i like it because most people dont know the least bit how taxes work haahahaha so maybe be simple but everyone should be able to understand the simplest form... Quote Share this post Link to post Share on other sites
kbordson 8 #8 May 9, 2009 Quote Quote Quote what does everyone think??? I think you're missing too many variables.. The 4 poorest earn nothing. number 5, 6, 7 probably earn minimum wage 8 and 9 are earning "moderate" salaries 10 earns so much it would make your head spin.. 1 - 4 earn / pay 0, or, 100%. 5 - 7 pay about 25% of everything they earn. 8 - 9 pay about 30% of everything they earn. 10 should in theory pay something like 38% but in fact probably can hire excellent lawyers and get away with paying about 22% by squirreling away undeclared earnings.. So in *theory*, the middle man has the lowest amount of disposable income. Especially since 1 - 4 probably earn cash on the side that nobody knows about & therefore can afford satellite TV, just like number 10, who probably works so damn much he doesn't even have time to watch his bigass flat-screen TV!!! Of course, my logic omits a bunch of factors as well, and is therefore just as faulty / biased as the OP!! That's actually not universal though. Not everyone that pays 0% in taxes, makes $0.00. The OP is a simplistic look at the US progressive tax rate, but the breakdown of revenue paid, is correct, regardless. The current top rate is 35%, about to go up to 39.5%. Actually with federal, state, city taxes and the self employed taxes... it was 53%. AND... just got a letter in the mail yesterday that the taxes were overpaid by $909.... guess what the fine on an overpayment of $909 is. Yup. $909. So all of you that think that the "rich" just work to get out of paying taxes, guess again. Sometimes they try to be honest... but the government just fines them for that. Quote Share this post Link to post Share on other sites
jerryzflies 0 #9 May 9, 2009 You're several years behind the times: www.hmtk.com/archives/if-beer-money-worked-like-taxes.htmlIf you can't fix it with a hammer, the problem's electrical. Quote Share this post Link to post Share on other sites
jshaver123 0 #10 May 9, 2009 i read it about a year ago but alot of people have not lol.... i just find it interesting lol..... And i meant it as a joke is why i originally posted it in bonfire... i didnt wanna debate it i was making a joke of our system.... Quote Share this post Link to post Share on other sites
Lefty 0 #11 May 9, 2009 Quote You're several years behind the times: www.hmtk.com/archives/if-beer-money-worked-like-taxes.html Yeah, you'd think people would have figured out the analogy by now. It's in the interests of most people to remain ignorant.Provoking a reaction isn't the same thing as saying something meaningful. -Calvin Quote Share this post Link to post Share on other sites
rhys 0 #12 May 9, 2009 QuoteActually with federal, state, city taxes and the self employed taxes... it was 53%. AND... just got a letter in the mail yesterday that the taxes were overpaid by $909.... guess what the fine on an overpayment of $909 is. Yup. $909. So all of you that think that the "rich" just work to get out of paying taxes, guess again. Sometimes they try to be honest... but the government just fines them for that. Shit no wonder you guys don't like your govornment controlling things, they are fucked up if they do that. In my country you are taxed a set rate depending on your income, it comes out of yur pay if you are an employee. If you do not work/earn the last half of the year, your tax amount on the first half is reduced to the average of the whole years income and you will receive a refund of the applicable amount. the only fine is a lte filing fee for around $50 if you do not file a tax return, most people get refunds. Business' have a similar result but pay quarterly if they choose or the following year. many deductions can be made. Never a fine for overpaying. being fined for paying too much is criminal."When the power of love overcomes the love of power, then the world will see peace." - 'Jimi' Hendrix Quote Share this post Link to post Share on other sites
kbordson 8 #13 May 10, 2009 QuoteShit no wonder you guys don't like your govornment controlling things, they are fucked up if they do that. And still some wonder why I don't trust the government. - Not "don't trust President Obama" nor "don't trust the GOP." I just am wary of the organization that it all has become. Quote Share this post Link to post Share on other sites
Shotgun 1 #14 May 10, 2009 QuoteAND... just got a letter in the mail yesterday that the taxes were overpaid by $909.... guess what the fine on an overpayment of $909 is. Yup. $909. Why were you fined for overpayment? I've never heard of that. Any time I've overpaid, I've been reimbursed with no fine. (But then I'm no tax expert, so I'm sure there are plenty of things I've never heard of.) Quote Share this post Link to post Share on other sites
kbordson 8 #15 May 10, 2009 QuoteQuoteAND... just got a letter in the mail yesterday that the taxes were overpaid by $909.... guess what the fine on an overpayment of $909 is. Yup. $909. Why were you fined for overpayment? I've never heard of that. Any time I've overpaid, I've been reimbursed with no fine. (But then I'm no tax expert, so I'm sure there are plenty of things I've never heard of.) Why was I fined? And why was the fine EXACTLY the same as the amount overpaid? Trust me, there will be phone calls on Monday. Quote Share this post Link to post Share on other sites
rhys 0 #16 May 10, 2009 QuoteAnd still some wonder why I don't trust the government. Understood, but it is still not a valid reason to dismiss the benifits of socialism of certain aspects of society. You just need decent people to be running the show and be open an honest with you. That tax setup you have is a rort and something needs to be done about it. respect is a two way street, if you are ripped off by the system, you are more likely to disrepect the system and rip it off yourself... = a lose, lose situation."When the power of love overcomes the love of power, then the world will see peace." - 'Jimi' Hendrix Quote Share this post Link to post Share on other sites
TomAiello 26 #17 May 10, 2009 QuoteQuoteAND... just got a letter in the mail yesterday that the taxes were overpaid by $909.... guess what the fine on an overpayment of $909 is. Yup. $909. Why were you fined for overpayment? I've never heard of that. Any time I've overpaid, I've been reimbursed with no fine. (But then I'm no tax expert, so I'm sure there are plenty of things I've never heard of.) Are you filing business taxes, or individual taxes?-- Tom Aiello Tom@SnakeRiverBASE.com SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
TomAiello 26 #18 May 10, 2009 QuoteYou just need decent people to be running the show and be open an honest with you. It's impossible to guarantee that those decent people will always run the show. This is a democracy--remember? The same kind of thing that elected Joe McCarthy?-- Tom Aiello Tom@SnakeRiverBASE.com SnakeRiverBASE.com Quote Share this post Link to post Share on other sites
Shotgun 1 #19 May 10, 2009 QuoteQuoteWhy were you fined for overpayment? I've never heard of that. Any time I've overpaid, I've been reimbursed with no fine. (But then I'm no tax expert, so I'm sure there are plenty of things I've never heard of.) Are you filing business taxes, or individual taxes? Individual. Is there typically a fine for overpaying business taxes? Quote Share this post Link to post Share on other sites
nerdgirl 0 #20 May 10, 2009 and its corollary: Dilbert economics. /Marg Act as if everything you do matters, while laughing at yourself for thinking anything you do matters. Tibetan Buddhist saying Quote Share this post Link to post Share on other sites
