Beer and Taxes

[TNKen]

As a sequel:

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 on 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 go t $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.

[zion zig zag]

Awww, the suffering, oppressed rich folks. Brought to you by the GOP

[lemon boy]

blah blah blah

liberals are evil
taxes are bad
conservatives are simple minded
how about you?

[leroy jenkins]

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.

Except they also get everything in life handed to them. I bet you belive in social Darwinism right? I bet you think that poor people are stupider than rich people right? I have a hint for you, this is not a meritocracy. The position your are born into determines what opportunities you will have, and therefore how wealthy you will be for your entire life. There is a huge amount of bias built into every part of our social and economic systems, in favor of the wealthy. True, if you work REALLY hard, you can move up or down the social ladder, but those are the exceptions that prove the rule. I am all for rich people having to give a little back to the rest of society. Of course they don't see it as giving anything back, they think they EARNED their money.

[Tippster]

The truly wealthy do not pay taxes. They pay people to find ways around them. So your little comparison only follows if you play by the rules, which they do not.

The 10th person should pay $49, but walks out on the tab.

[Jer]

Suppose you are an idiot.
Now suppose you can vote.

All else follows.

[Steven S. Dallas]

The idea that progressive taxation dissuades people from working harder and making more money is ridiculous.

[bagtagley]

While Napster was pretty cool, overall the 2007 internet is far superior to what you're using.

[CUBUCK]

Except they also get everything in life handed to them. I bet you belive in social Darwinism right? I bet you think that poor people are stupider than rich people right? I have a hint for you, this is not a meritocracy. The position your are born into determines what opportunities you will have, and therefore how wealthy you will be for your entire life. There is a huge amount of bias built into every part of our social and economic systems, in favor of the wealthy. True, if you work REALLY hard, you can move up or down the social ladder, but those are the exceptions that prove the rule. I am all for rich people having to give a little back to the rest of society. Of course they don't see it as giving anything back, they think they EARNED their money.

Way to answer one sweeping generalization with another congrats!

[leroy jenkins]

Way to answer one sweeping generalization with another congrats!

Yea, but this generalization is true, since it is not about how people act, but about the bias that is built into our system. Everyone lives in the same system, and therefore is affected by the same built in bias'.

[TNKen]

True, if you work REALLY hard, you can move up or down the social ladder, but those are the exceptions that prove the rule.

I did. And paid my own way to boot.

Ken

[CUBUCK]

Yea, but this generalization is true, since it is not about how people act, but about the bias that is built into our system. Everyone lives in the same system, and therefore is affected by the same built in bias'.

I just think comments like yours cheapen the accomplishments of those that have done well for themselves.

[mcsquared]

Every time some variant of this email comes around, (and to the original poster, this same exact thread has been posted numerous times, try to find original material) I am confused about it. What does the $100 dollars represent? Is the author trying to imply that a "rich" person pays 59% of their income in taxes (Nobody pays 59% of their income in taxes.)? Or is it trying to imply that "rich" people account for 59% of all the taxes paid? Because if it is the latter, I still think it is bullshit. I know how much I make and how much I pay in taxes. And I know how much my father makes and how much he pays in taxes. And he makes roughly 2-3 times what I make. But our effective tax rate is about the same (~15%). So yes, I guess he does pay more in taxes than I do but we each get to keep 85 cents/$ of what we earn.

Anyways, that is the long way of me saying that this thought provoking post is a bunch of BS and not grounded in the reality of how taxes are paid. Bill Gates, the guy pushing the shopping cart down my street and I all pay the same in taxes. We each pay 10% for each dollar between $0 and $7800 and 15% for each dollar between $7800 and $3200 etc, etc.

[leroy jenkins]

I just think comments like yours cheapen the accomplishments of those that have done well for themselves.

Actually, if you were paying any attention at all, you would be able to tell that my comments were saying the exact opposite. If you come from nothing, and through hard work and your own merits, work your way to a better position in life, it is respectable BECAUSE the system was working against you, making it even more difficult.

If you come from privilege, and merely manage to stay privileged, thats just luck, and not being a complete fuck up. Hardly something to admire.

[CUBUCK]

Actually, if you were paying any attention at all, you would be able to tell that my comments were saying the exact opposite. If you come from nothing, and through hard work and your own merits, work your way to a better position in life, it is respectable BECAUSE the system was working against you, making it even more difficult.

If you come from privilege, and merely manage to stay privileged, thats just luck, and not being a complete fuck up. Hardly something to admire.

I'm just trying to let you know that there are alot more people out there that fit into the second catagory than you giving credit for. Additionally, many people who do come from wealth use that safety net as an opportunity to pursue activities such as the peace corps, doctors without borders etc etc. I'm just trying to tell you its not as black and white as you want to make it. The people that come from wealth and are all around fuck ups and get high paying jobs at daddy's company are fewer than you think.

[Jer]

I did. And paid my own way to boot.

Horse dung.

You stood on the shoulders of everybody.

[leroy jenkins]

I'm just trying to let you know that there are alot more people out there that fit into the second catagory than you giving credit for. Additionally, many people who do come from wealth use that safety net as an opportunity to pursue activities such as the peace corp, doctors without borders etc etc. I'm just trying to tell you its not as black and white as you want to make it. The people that come from wealth and are all around fuck ups and get high paying jobs at daddy's company are fewer than you think

Honestly man, I come from wealth. Not ridiculous wealth, but wealthier than most for sure. I didn't get a car till I was 18, and it was used. I can't just buy whatever I want, and have to work hard to be able to spend a bunch of money on ski passes and skis and all that, but thats just it, I'm working hard to buy $1200 skis from igneous, while not having to worry about how I'm going to pay for college in the fall.

While I am not a complete fuck up, I am also not really working all that hard. Theres a Sam Roberts song that says "theres no road thats not a hard road to walk on" and while thats true, everyone has issues to deal with in their lives, in terms of strictly surviving, and supporting myself, I don't have a whole lot to worry about. This is not just because my parents help me pay for stuff. My dollar goes a lot farther than a poor persons, and that will be become even more true as my life goes on.

Housing, hiring practices, ability to get an education, they are all made to be much easier on the wealthy, and not just in terms of being able to pay for them. I'm not saying this as some bitter person, upset with their lot in life, too lazy to work hard, and making excuses about how the world is set against them. I grew up in Aspen and these bias' just seem obvious to me. I see it everywhere.

[BLOOD SWEAT STEEL]

True, if you work REALLY hard, you can move up or down the social ladder, but those are the exceptions that prove the rule.

So let's punish them, right?!?! You work for what you think you're worth, Leroy. Accept where you're at and you'll get what you've always gotten. Bias up and down the economic ladder? Perhaps. Well - probably, actually. But if nothing else, I would call that quite a motivator.

[powpig]

(Nobody pays 59% of their income in taxes.)?
But our effective tax rate is about the same (~15%). So yes, I guess he does pay more in taxes than I do but we each get to keep 85 cents/$ of what we earn.

Ever stop to think that our country was formed because the founding fathers thought they were being raped by King George because they had to pay 5% in taxes?

You think you only pay 15%? I contend you pay at least double that.

Do you live in a state that has State Income Tax?
Own your own home, don't forget Property Taxes.
Does your state have Sales Tax? Just on food (CA) or everything (WY)?
If you drive you're paying huge taxes on each gallon of gas, state & probably county & city too.
You drink alcohol, your beer wine & booze is being taxed.
Look at the taxes added to your phone bill.
Taxes on your cable or satellite bill if you watch TV that way.
Electric bill has taxes too.
Gas company has tax added to their bill too.
You live in an area with bridge or hwy tolls?

What have I forgotten?


Add it all up & it ain't pretty, certainly a far cry from what the founding fathers envisioned when they risked their lives to escape uncontrolled taxation.

[Jer]

What have I forgotten?

The price of world domination?

it ain't pretty, certainly a far cry from what the founding fathers envisioned

Ayup.

[lemon boy]

Add it all up & it ain't pretty, certainly a far cry from what the founding fathers envisioned when they risked their lives to escape uncontrolled taxation.

^^^somebody didn't pay so good attention in history class^^^

way to change those facts around to suit your position

[leroy jenkins]

So let's punish them, right?!?! You work for what you think you're worth, Leroy. Accept where you're at and you'll get what you've always gotten. Bias up and down the economic ladder? Perhaps. Well - probably, actually. But if nothing else, I would call that quite a motivator.

Punish them? Hardly, their kids will have a serious leg up in the world, as will they for the rest of their lives. I would also think that if you've come from nothing, and become wealthy through hard work and merit, that you would remember what it was like to have nothing, and almost no oportunity. I'm not saying all poor people should be given money, but I would like to see schools in poor areas better funded.

[leroy jenkins]

Add it all up & it ain't pretty, certainly a far cry from what the founding fathers envisioned when they risked their lives to escape uncontrolled taxation.

It wasn't that they were against taxation, its that they wanted representation. Taxation was simply the cause they chose.

[mcsquared]

Ever stop to think that our country was formed because the founding fathers thought they were being raped by King George because they had to pay 5% in taxes?

You think you only pay 15%? I contend you pay at least double that.

Do you live in a state that has State Income Tax?
Own your own home, don't forget Property Taxes.
Does your state have Sales Tax? Just on food (CA) or everything (WY)?
If you drive you're paying huge taxes on each gallon of gas, state & probably county & city too.
You drink alcohol, your beer wine & booze is being taxed.
Look at the taxes added to your phone bill.
Taxes on your cable or satellite bill if you watch TV that way.
Electric bill has taxes too.
Gas company has tax added to their bill too.
You live in an area with bridge or hwy tolls?

What have I forgotten?


Add it all up & it ain't pretty, certainly a far cry from what the founding fathers envisioned when they risked their lives to escape uncontrolled taxation.

Yes, 15% roughly. I did the math. Tax liability divided by income. I was talking about federal income tax which is what the original poster, ostensibly, was referring to as well.

But doesn't everybody have to pay those other taxes regardless of income? Sure, rich people pay more sales tax because they spend more and pay more real estate taxes because they own more real estate (and also get deductions and exemptions and only pay 15% on capital gains). And you could probably argue that all those other taxes are even more unfair to the less wealthy since a gallon of milk costs the same regardless of income and therefore the sales tax is a larger percentage of a lpoorer persons income.

[BLOOD SWEAT STEEL]

Punish them? Hardly, their kids will have a serious leg up in the world, as will they for the rest of their lives.

As well they should, they've earned it.

I would also think that if you've come from nothing, and become wealthy through hard work and merit, that you would remember what it was like to have nothing, and almost no oportunity.

Yes, I remember it vividly. I didn't think the world owed me anything then, and I don't think I should be arm-twisted into paying someone else's way now.

I'm not saying all poor people should be given money, but I would like to see schools in poor areas better funded.

Is school funding an issue? In some areas, yes - to an extent. I think administration squandering combined with taxpayers who don't give a shit about the appropriation of their dollars is the bigger issue. This is before we get into the "parents who just don't give a shit about their own kids and what they're doing" discussion.

Extorting money from hard working successful folks and writing checks with it until people stop bitching and making excuses (although commonly accepted practice) isn't always the answer. It's a solution, but it's not a cure.