This is what happens when you spread the wealth around, but people just can't seem to understand it.
Everybody want something for nothing
Bar Stool Economics:
Suppose that every day, ten men go out for beer and the bill for allTen comes to $100. If they paid their bill the way we pay our taxes, itwould 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 dayand seemed quite happy with the arrangement, until one day, the owner threwthem a curve. 'Since you are all such good customers, he said, 'I'mgoing 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 thefirst four men were unaffected. They would still drink for free. But whatabout the other six men - the paying customers? How could they divide the$20 windfall so that everyone would get his 'fair share?' They realizedthat $20 divided by six is $3.33. But if they subtractedthat from everybody's share, then the fifth man and the sixth man wouldeach end up being paid to drink his beer. So, the bar owner suggested that itwould be fair to reduce each man's bill by roughly the same amount, and heproceeded 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 todrink for free. But once outside the restaurant, the men began to comparetheir 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 adollar, too. It's unfair that he got ten times more than me!'
'That's true!!' shouted the seventh man. 'Why should he get $10back when I got only two? The wealthy get all the breaks!'
'Wait a minute,' yelled the first four men in unison. 'Wedidn't get anything at all. The system exploits the poor!'
The nine men surrounded the tenth and beat him up. The next night the tenthman didn't show up for drinks, so the nine sat down and had beers withouthim. But when it came time to pay the bill they discovered somethingimportant. They didn't have enough money between all of them for even halfof the bill!
And that, boys and girls, journalists and college professors, is how our taxsystem works. The people who pay the highest taxes get the most benefit froma tax reduction. Tax them too much, attack them for being wealthy, and theyjust may not show up anymore. In fact, they might start drinking overseaswhere 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.
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