Wednesday, October 17, 2012

Barstool Economics

Suppose that every day, ten men go out for a 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 $1.00
The sixth would pay $3.00
The seventh would pay $7.00
The eighth would pay $12.00
The ninth would pay $18.00
The tenth man (the richest) would pay $59.00

So that’s what they decided to do. The men drank in the bar every day and seemed quite happy with arraignment, 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 $20.00". Drinks for the ten men now cost just $80.00.

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 there "fair share?" They realized that $20.00 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," 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 union. 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, even cursing him for his absence.

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! Looking at each other, they began swearing at their absent companion.

And that, boys and girls, journalist 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.

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

Warning: this joke above may be above the capability of the average Democrat to understand {or unless you are completely braindead, you will recognize Barack Obama's position on "soaking those evil rich people", and this may cause random cases of heart failure.

- Miss Lisa


hiswiserangel said...

Miss Lisa is a wise and wonderful woman, in addition to having the patience of Job.

wirecutter said...

Luckily for me, she's also easily influenced.

Paladin said...

This is genius in its simplicity and ease of understanding... I love it. I imagine it would make many progressives eyes glaze over with confusion.

The situation is actually worse, believe it or not. If the bar owner initiated some beer drinking credits for the patrons (earned income credit, Child tax credits) some of the group not only would drink for free - they'd actually be paid to do so.

angrymike said...

I love it, posted
Thanks Miss Lisa.......;)
Smart woman you got there Kenny, don't let her out of your;)

Skip said...

Darlin', I'm stealin' this one.

Stinkwilly said...

Fucking libberpukes that could possibly read this ...still wouldn't be able to comprehend it!!
They would all walk around scratching their heads saying , hunh!!

Timbo1 said...

As Maggie Thatcher pointd out, the trouble with Socialism is that eventually you run out of other people's money.

MissK said...

Perfectly Explained.. Grabbed and Posted, Thank you