14 February 2008

Barstool Economics

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.

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.


Now, That IS extremely accurate on the tax system.

HOWEVER it cannot be maintained except due to the current economic system.

To expound...Men #7, #8 & #9 work for guvco-mini, guvco-major & guvco dependent industries (defense/heavy construction--schools & roads/agriculture/etc.)...so technically the money they "bring" to the table IS already from Men #'s 5, 6 & 10 taken from them earlier by #7, administrated by #8 and re-distributed into the economy by #9

Men #5 & 6, being self-employed or otherwise just hardworking folk, are just trying to catch a break, be left alone, save a bit for a rainy day, pay their obligations AND position to earn their dreams (picture: Carl Drega)...I personally believe they may be the only possible true libertarians in the group, here's why:
  • #'s 1-4 blame somebody else for their problems & expect to be given a solution---THEY HAVE BEEN CONDITIONED AND SHOW NO DRIVE TO EDUCATE THEMSELVES TO EFFECT PERSONAL CHANGE
  • #7/8/9 being employees of the beast have already sold out---THEY ARE THE ONES ENFORCING TAX POLICY
  • AND because the #10 can do anything he wants--up to leaving geographically if he cares to, etc., he doesn't need to have a philosophy, he'll just pay #7/8/9 under-the-table, er, cleanly passed through a LOBBY-ist for expanded protectionist policies or subsidy programs to "get some of his own back."---THINK "NEW WORLD ORDER"

Consequently, feeding the entire class warfare system of degradation through taxation. True #5 & #6 may have willingly jumped into the melee...but they finally put some "accidental" blows on EVERYBODY riding their backs, not just #10

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