tax system explained

The Tax System Explained in Beer

By admin | Published: January 12, 2012




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 ball. “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 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 men ? 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 a h higher percentage the poorer he was, to follow the principle of the
tax system they had been using, and he proceeded to work out the amounts he
suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to
drink for free. But, once outside the bar, the men began to compare their
savings.

“I only got a dollar out of the $20 saving,” 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 benefit than me!”
“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. This new tax 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 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, boys and girls, journalists and government ministers, 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 somewhat
friendlier.

David R. Kamerschen, Ph.D. – Professor of Economics.

as Rush would say for all you people in Rio Linda, just because the person with the highest income is getting bigger saving doesn't mean aren't paying fair share it just mean the percentage will be bigger because THEY HAVE MORE!!!!

Candidates

I know I had an earlier blog about the 2012 candidates and my dream cabinet but i'm changing some stuff up here. But first let me start by stating yes all the candidates do have some flaws but who ever was a perfect candidate. I still like Newt as probably my number 1 but i'm going to be honest and say Santorum has tied him I don't think he will secure the nomination but the more I think about it the more I think he is the best candidate in the field. I think he will be more consistant the Newt who since leaving the Speakership has done some flip flopping. he has supported some moderate or liberal republicans, done the global warming think with Nancy Pelosi, stated the era of Reagon is over and said FDR is the best president of the 20th century which obviously was not, good wartime president but not good for the country when it came the economy which got worse under him because of the burdomsome taxation and spending as well as social programs. I like Perry but immigration is a slight problem and he seems to wear out in debates but he does have overall one of the best records when it comes to his governor record. I like Bachmann on most issues as well but I don't think she has it in her to secure nomination. Paul I can agree with on alot of economic issues like less taxes across the board, drastic budget cuts though wish he would not do as much on DoD as he wants but cut more else where, his America brought all this hate on us view as well as his seeming to be weak when it comes to wanting to stand up to people is what gets me but i can agree with his stop forking out billions of dollars for other countries why pump billions into Africa when they are going to continue to spread aids and continue to fight at each other or Pakistan whos going to use it to support terrorist groups like al-qaeda, the taliban or groups that will attack another one of our allies-India or Europe that can't even get their own economies right. Don't get me wrong I like Europe i have been to some of these countries and the people are nice and countries are beautifal but why should we keep them up when we have out own economic issues and already don't have any money. But to get back to my point. With the exception of Romney maybe Paul I don't have a problem voting for any of these candidates. But if we were smart we would have Newt or Santorum as the nomination or even Perry and hopefully if any of those three get nomination they put one of the others as VP candidate or puts up Palin as VP nom. I would like to see Jim Diment or Marco Rubio as the VP but they are much needed in the senate. So Republicans i'm speaking to you get out and vote in the primaries and don't give into the RNC, the media or whatever lets put the candidate we want in as the nomination and not what the establisment wants we dont need Romney who cares if he's electable we need a conservative we don't need some one who will be like Obama, the establishment is wrong in stating we need a moderate we have kept putting their people in over and over with exception of Reagon in and look they've lost by large margin or have been bad as president look at Nixon, Ford, Dole or the Bushes. Don't get me wrong as people i liked the bushes but policy wise W wasn't that great on some issues i think he had it right, he wanting tax cuts got some good, wanting to regulate freddie and fannie and redo Social Security to like what Chile has and the war on terror but either gave up on them or didn't do it right. but overall we have a good field for conservatives newt who i would say overall would be 85% 90%, same for santorum, perry and bachman.