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FreedomFighter8008
10-21-2008, 08:20 PM
TAX CUTS EXPLAINED

Because it's the election season, let's put tax cuts in terms everyone can understand.

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 curved ball (or is that a curved beer!). "Because 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 paid $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 man 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R Kamerschen, Ph.D.
Professor of Economics
University of Georgia

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible

tropicangela
10-21-2008, 08:31 PM
Brilliant.

Perium
10-21-2008, 08:45 PM
nicely done

kathy88
10-21-2008, 09:05 PM
I just sent this out to my entire address book.

FreedomFighter8008
10-22-2008, 08:04 AM
bump

sevin
10-22-2008, 11:13 AM
genius. I love it!

muh_roads
10-22-2008, 11:21 AM
What if the 10th man made his riches within the military industrial complex or the financial industry paying themselves too much who now require a bailout, etc...how would you feel then?

In other words he made his money off of taking money from the 5th, 6th, 7th, 8th and 9th guy. And he takes an additional amount of money from all of them including the first four poor guys thru inflation by getting new monopoly money printed especially for him.

If the system benefited him so he could take your money from you initially, then why shouldn't he pay more for the beer later? Depending on what industry he is in, I'd say he is just paying you back.

pahs1994
10-22-2008, 11:38 AM
Nice! i am going to post this on myspace

frankdogg
10-22-2008, 12:58 PM
Awesome story to break it down in layman's terms!

FreedomFighter8008
10-22-2008, 04:31 PM
bump

QueenB4Liberty
10-22-2008, 05:13 PM
I love it. I'm gonna try posting it on a mostly liberal message board..see what reception I get.

UtahApocalypse
10-22-2008, 05:27 PM
Can anyne make that into a comic strip, or even a video??

FreedomFighter8008
10-22-2008, 05:41 PM
Great ideas!! A comic strip or video would be awesome and can't wait to hear what the responses are on the liberal boards. :)

mport1
10-22-2008, 05:46 PM
We should just reduce taxes to 0. Problem solved.

TastyWheat
11-18-2008, 04:04 PM
Slightly different story here, still the same idea: http://www.freerepublic.com/focus/news/802372/posts

Great allegory, everyone should read and distribute this.

SnappleLlama
11-18-2008, 04:20 PM
This is great! Thanks!

escapinggreatly
11-18-2008, 06:22 PM
Ha, nicely done.
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satchelmcqueen
11-18-2008, 07:58 PM
What if the 10th man made his riches within the military industrial complex or the financial industry paying themselves too much who now require a bailout, etc...how would you feel then?

In other words he made his money off of taking money from the 5th, 6th, 7th, 8th and 9th guy. And he takes an additional amount of money from all of them including the first four poor guys thru inflation by getting new monopoly money printed especially for him.

If the system benefited him so he could take your money from you initially, then why shouldn't he pay more for the beer later? Depending on what industry he is in, I'd say he is just paying you back.

:D