A Lesson in Taxation

adwilk

adwilk

Audioholic Ninja
This should teach everyone about taxation

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!'


'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, 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.




Not sure exactly where this came from, one of my buddies posted it in another forum (bb.com) but I liked it...
 
R

rnatalli

Audioholic Ninja
This was posted here at some point as I remember reading it. It's so full of flaws it isn't even funny.
 
lsiberian

lsiberian

Audioholic Overlord
This should teach everyone about taxation

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!'


'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, 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.




Not sure exactly where this came from, one of my buddies posted it in another forum (bb.com) but I liked it...
Yeah but this actually wouldn't happen.

They would all be fine with the distribution. Plus the guy paying the 59 obviously has less need for the ten. In fact It would be best to use the 10 on the bottom guys since they need the cash.


Does a person need a castle? wouldn't the world be better off if he built 20 homes instead of just 1. Wouldn't that give him a place to house 20 of his employees.

Greed is dangerous and very destructive. No one needs acreage except farmers and they tend to get paid the least. Shouldn't they make more.

Capitalism relies on cheap labor and resources. This is why we must work towards socialism. A balance between wealth and poverty. The requirement to participate must be a reasonable work contribution.

I could go on but this isn't the forum. Only a Rich person would post this so take that into that. I personally have no issues paying my fair share in taxes. In fact I hope they raise taxes so we can fix health care.
 
adwilk

adwilk

Audioholic Ninja
. The requirement to participate must be a reasonable work contribution.
I do agree with that... unfortunately, it seems as if this Country has decided its not necessary to pull one's own weight to get a handout.. heck, you dont even have be from here... But like you said, this isnt the forum... :eek:
 
C

craigsub

Audioholic Chief
The Fair Tax is my favorite, and that's coming from a guy who owns several retail businesses. The idea of customers coming into my business after keeping 100% of their income is pretty enticing, even with the somewhat higher monthly payments a car would cost.

Plus, bringing all the underground economy into being taxpayers is a compelling thing to do.
 
J

JLMEMT

Junior Audioholic
Yeah but this actually wouldn't happen.

They would all be fine with the distribution. Plus the guy paying the 59 obviously has less need for the ten. In fact It would be best to use the 10 on the bottom guys since they need the cash.


Does a person need a castle? wouldn't the world be better off if he built 20 homes instead of just 1. Wouldn't that give him a place to house 20 of his employees.

Greed is dangerous and very destructive. No one needs acreage except farmers and they tend to get paid the least. Shouldn't they make more.

Capitalism relies on cheap labor and resources. This is why we must work towards socialism. A balance between wealth and poverty. The requirement to participate must be a reasonable work contribution.

I could go on but this isn't the forum. Only a Rich person would post this so take that into that. I personally have no issues paying my fair share in taxes. In fact I hope they raise taxes so we can fix health care.
Are you serious??

What are the flaws in it? it is a fairly simple explanation. So the "rich" should pay to support the poor? Including the ones that won't do anything for themselves?

I think not!! Of course I work for what I have. :rolleyes:
 
G

griffinconst

Senior Audioholic
I don't think so! Under the socialism plan we all get equal by bringing everyone down. It kills achievers and achievement, leaving everyone equally poor and no rich people to pay the bulk of the taxes thus raising taxes on the poor.
How about this...It's not fair for someone to get a great set of speakers unless we all get them so everyone ends up with a boombox.
Capitolism is the worst system until you compare it to anything else.
 
Rickster71

Rickster71

Audioholic Spartan
The problem with socialism is that you eventually run out of other people's money.
 
Adam

Adam

Audioholic Jedi
The problem with socialism is that you eventually run out of other people's money.
That makes me think that some of my friends' girlfriends were socialists. ;)

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itschris

itschris

Moderator
It used to be you were responsible for yourself. I don't know where that mentality came from that someone else should pay for your lot in life. Greed it good. Make no mistake about it. Greed... the desire to attain more or something better, is a fundamental driver of ambition which leads to innovation which should lead one to prosper.

I left my accountant yesterday. We're trying to plan for the proposed changes in taxes. The way things stand at this point... My family is going to get penalized just over $8,300. Don't even talk to me about right and wrong, morality, or whatever bullshit liberal nonesense you have to spew.

Both my wife and I have busted our butts and sacrifiiced and put up with a lot of stress in our professiion to get where we're att and earn the money we make. Now someone else, not at my income level, is going to tell me I'm a bad person for making that much money? Please. The little story about the beer may have it's faults, but the premise is dead on.
 
R

rnatalli

Audioholic Ninja
The problem with socialism is that you eventually run out of other people's money.
The same problem exists with capitalism. Eventually the poor will run out of the money for the rich to take which eventually leads to an uprising. That said, I'm not saying socialism is better than capitalism. I think many fail to realize that both are needed and it comes down to how much of each.
 
lsiberian

lsiberian

Audioholic Overlord
It used to be you were responsible for yourself. I don't know where that mentality came from that someone else should pay for your lot in life. Greed it good. Make no mistake about it. Greed... the desire to attain more or something better, is a fundamental driver of ambition which leads to innovation which should lead one to prosper.

I left my accountant yesterday. We're trying to plan for the proposed changes in taxes. The way things stand at this point... My family is going to get penalized just over $8,300. Don't even talk to me about right and wrong, morality, or whatever bullshit liberal nonesense you have to spew.

Both my wife and I have busted our butts and sacrifiiced and put up with a lot of stress in our professiion to get where we're att and earn the money we make. Now someone else, not at my income level, is going to tell me I'm a bad person for making that much money? Please. The little story about the beer may have it's faults, but the premise is dead on.
This is not an attack, but something for you to think about.

Hunger and social justice issues are real. Many are caused by Greed. If you would ever like to witness a firsthand account of greed. Visit Hati. There you can see firsthand the gap between the rich and the poor and how children starve while a small group of people(selected to rule the island by anglos) still hoard all the money and resources.

In our own nation there are numerous children in our own nation that go to bed without a meal. Our nation is huge. We have about 5% of the worlds population. We also have the resources and land to feed and house everyone. But instead of ensuring the bottom group of hard working blue collar employees that are the basis of our system. We relegate many of them to live in flea markets(true story in my own community) and all sorts of terrible situations. Plus the wages have dropped. Hours are longer, people are overworked and the rich have exploited the 2 job household. Which never used to exist.

We have a death rate that rivals many poor developing nations. The causes for this are numerous, but the situation is deteriorating.

On top of that the tax rate becomes almost flat if you consider all the fees and crap that we all pay the same for. Yeah that vehicle fee, driver's liscense fee(etc) It's ridiculous. Don't think of taxes as only the IRS. They get our money in so many other ways. Like Toll roads. That is a regressive tax not a flat tax. As is Sales Tax. Which is why the fair tax is such a bad idea.

I think our nation needs a salary cap. There should be a limit to how much a person can earn in any given year. Why? Because there is a point at which a person no longer has any real use for the income and the spending becomes excessive. Plus shouldn't the middle class get the bonuses and raises? A 1000,000 dollar bonus could be 500 2,000 dollar bonuses.

Example of bad policies:
In our state our governor lowered property taxes, hiked college tuition and fees on all sorts of things to make up the difference. Does that make any sense? Raise the burden on people who have no income or low income?:eek:

It's easy for us to blame the poor as just being lazy, but I suggest you consider that point. Many are the mentally ill and or addicts. But not all are. You might find someone like you who through no real fault of their own ended up on the street. Those cases are real and do exist. The whole point of social policies are to give people the opportunity of a better life. Many will take that chance.

Of course the problem with the government doing it. Is that they suck at everything. So I don't know if the tax system is the way to go.

I think every contributing member of society should get a fair salary, hours, and healthcare for their labor, and that is simply not the case globally.
 
R

rnatalli

Audioholic Ninja
It used to be you were responsible for yourself. I don't know where that mentality came from that someone else should pay for your lot in life. Greed it good. Make no mistake about it. Greed... the desire to attain more or something better, is a fundamental driver of ambition which leads to innovation which should lead one to prosper.

I left my accountant yesterday. We're trying to plan for the proposed changes in taxes. The way things stand at this point... My family is going to get penalized just over $8,300. Don't even talk to me about right and wrong, morality, or whatever bullshit liberal nonesense you have to spew.

Both my wife and I have busted our butts and sacrifiiced and put up with a lot of stress in our professiion to get where we're att and earn the money we make. Now someone else, not at my income level, is going to tell me I'm a bad person for making that much money? Please. The little story about the beer may have it's faults, but the premise is dead on.
It's sad that the our only motivation as a species is greed, but don't argue as that's the way it is.

As someone coming from an investment background, I feel your pain with regards to taxes; but no one ever said life is fair. The poor outnumber the rich and that's just the way it is.

One other thing, do not presume that because you make more than someone, somehow you work harder. I can think of tons of people who work much harder than I that make far less.
 
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mulester7

mulester7

Audioholic Samurai
It's sad that the our only motivation as a species is greed, but don't argue as that's the way it is.
.....Rnatalli, I'd say our main motivation as a species is simply to survive....greed I would designate as a never-to-be-satisfied sickness.....
 
lsiberian

lsiberian

Audioholic Overlord
It's sad that the our only motivation as a species is greed, but don't argue as that's the way it is.

As someone coming from an investment background, I feel your pain with regards to taxes; but no one ever said life is fair. The poor outnumber the rich and that's just the way it is.

One other thing, do not presume that because you make more than someone, somehow you work harder. I can think of tons of people who work much harder than I that make far less.
Then why is it different for others?
 

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