INSIDE LAKESIDE
Log In or Register

Check your spam/junk folder for activation e-mail after you register.

Join the forum, it's quick and easy

INSIDE LAKESIDE
Log In or Register

Check your spam/junk folder for activation e-mail after you register.
INSIDE LAKESIDE
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Tax system explained in beer!

Go down

Tax system explained in beer! Empty Tax system explained in beer!

Post by TomQC Thu Dec 31, 2020 6:54 am

The Tax System Explained in Beer

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 (by taxpayer deciles), 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 ball. “Since you’re all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten men would 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? How could they divide up the $20 windfall so that everyone would get his fair share?

The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to suggest the new lower amounts each should now pay.

And so the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth now paid $2 instead of $3 (a 33% saving).
The seventh now paid $5 instead of $7 (a 29% saving).
The eighth now paid $9 instead of $12 (a 25% saving).
The ninth now paid $14 instead of $18 (a 22% saving).
The tenth now paid $50 instead of $59 (a 15% saving).

The first four continued to drink for free, and the latter six were all better off than before. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the fifth man. He pointed to the tenth man, “But he got $9!”

“Yeah, that’s right,” exclaimed the sixth man. “I only saved a dollar, too. It’s unfair that he saved nine times more than me!”

“That’s true!” shouted the seventh man. “Why should he get $9 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. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next day, the tenth man didn’t show up, so the other nine sat down and had their 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 is how our tax system works. The people who already pay the highest taxes will naturally 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 friendlier.
TomQC
TomQC
Share Holder
Share Holder

Posts : 244
Join date : 2014-07-11
Location : Canada

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by gringal Thu Dec 31, 2020 8:17 am

Was that supposed to be humorous?

gringal
Share Holder
Share Holder

Posts : 11561
Join date : 2010-04-09
Location : Lake Chapala (from CA)
Humor : occasionally

rckrckr, Smartalex and SunshineyDay like this post

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by Jreboll Thu Dec 31, 2020 9:10 am

You forgot to mention that the tenth man had a lot of stock in the brewery companies and was half owner of the bar so he wanted to promote the ambiance of the business.
This is much like big pharma promoting medical conferences to push their drugs.
I am so sorry that he got beat up and I sympathize with you. You are truly a fan of the 1%.

Jreboll
Share Holder
Share Holder

Posts : 1839
Join date : 2014-09-24

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by kiko Thu Dec 31, 2020 9:26 am

The fly in the ointment is that there is missing data, for example, it is not known what the taxable income of each taxpayer is.  

If the bottom four 1 thru 4 had no taxable income then they paid no tax.  

If 5 thru 9 had taxable income aggregate of $1,000,000, at 200,000 each then they would each pay an equal amount of taxes.  If taxpayer 10 had taxable income of 5,000,0000, then his tax burden should be a hell of lot more than either $50 or $59.00.  

If you look at the income disparity that has occurred over the last 50 years in the US, I would not surprised if taxpayer #10 had the most income far in excess of the first 9 taxpayers.  So that begs the question of why not a flat tax?

Well that one is simple, poor people do not have lobbyists in Washington, and the middle class does not have lobbyists in Washington.  So where do you think a flat tax will end up?  In the trash.
kiko
kiko
Share Holder
Share Holder

Posts : 874
Join date : 2014-09-10

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by TomQC Thu Dec 31, 2020 11:05 am

Guess we got that one out of the way!  Dead Horse    Very Happy Very Happy
TomQC
TomQC
Share Holder
Share Holder

Posts : 244
Join date : 2014-07-11
Location : Canada

kiko likes this post

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by Jreboll Thu Dec 31, 2020 12:03 pm

I’ve never understood why some peons like us want to stick up for the existing unfair structure. Rich people have connections, lobbyists, lawyers and accountants to help them minimize their taxes. You, TomQC , and I don’t have anyone to help us out and we know the trickle down argument is nothing but a joke. Stop trying to help them out. They already own most of the nation’swealth.

Jreboll
Share Holder
Share Holder

Posts : 1839
Join date : 2014-09-24

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by Smartalex Thu Dec 31, 2020 4:29 pm

I have a different vision: Ten guys go to a bar every day, have a few beers, tell some jokes, go home...and there is no tab to pay or any reason to beat someone up.
Smartalex
Smartalex
Share Holder
Share Holder

Posts : 2677
Join date : 2012-05-14
Location : Chapala

Back to top Go down

Tax system explained in beer! Empty Re: Tax system explained in beer!

Post by Sponsored content


Sponsored content


Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum