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Life & Events > To My Democrat Friends: Why Republicans Are Great
 

To My Democrat Friends: Why Republicans Are Great


Our Tax System Explained: 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 got'

'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, 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.

posted on Oct 17, 2008 10:58 AM ()

Comments:

This is the Republican philosophy. " Keep the wealthy prosperous and happy and it will trickle down so that all benefit." Unfortunately, this analogy fails to address one fact. The wealthy don't pay their fair share right now. They enjoy tax breaks that allows them to keep six times more of their income dollar for dollar than the average Middle Class guy gets to keep of his.
comment by redimpala on Oct 22, 2008 9:46 AM ()
I'm a dyed-in-the-wool Democrat who considers himself to be a moderate with decidedly liberal leanings.
However, I am in favor of abolishing the present income tax structure that we are now burdened with and replacing it with a 10% flat tax with absolutely no exemptions (including churches) and no loopholes.
comment by hayduke on Oct 18, 2008 1:19 PM ()
Entertaining Analogy, though something of a generalization. As a liberal Democrat, I can say that I don't believe either party is truly addressing the problems with taxes as they should. Taxation should be fair, and equal, and it's not. While the wealthy paid the largest portion of taxes in this nation, there exists loopholes, decreased rates for capital gains, no taxation on additional income over $100,000 for things which help everyone in our nation (namely social security and medicare), and other problems which need addressed. And many of those, neither party really wants to touch (the joys of having big money and special interests involved in our political arena, huh...)
comment by ekyprogressive on Oct 18, 2008 5:51 AM ()
I like that analogy... a lot. Even tho I am a democrat!
comment by kristilyn3 on Oct 17, 2008 12:05 PM ()

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