Bar Stool Economics

[Goofball]

Hot off my email. I like it:

Bar Stool Economics

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 s 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 o f $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside t he 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.

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.

[CrossLOPER]

...University of Georgia...

I stopped right there.

[Strike For The South]

I stopped right there.

So you read the whole thing?

[CrossLOPER]

So you read the whole thing?

yeah

[LittleGrizzly]

I pretty much stopped reading when i got to goofballs signature...

So if i understand it theres a rich alcoholic who needs some poor buddys to drink with... count me in!

[Sasaki Kojiro]

Well actually, the ninth man is the bar owner and is making bank while the tenth man owns the credit card company that allows the first 4 men to borrow money to buy beer since they can't afford it.

[Louis VI the Fat]

Ten men show up for work one day in their car mafufactering plant. Like their fathers had done before them. And their fathers before them. In fact, they were once the manufacturing powerhouse of the world. They were proud of it.

One of the men was the leader of the pack.
As a reward for his responsible position, he made 5 times as much as the others combined.

Then, one day, he discovered that he could produce cheaper if foreigners did the manual work abroad. He laid five men off.

The top man, as a reward, now was paid 137 times as much as the others combined.

He then re-hired these five fired men to be salesmen in his car dealership, to sell more cars to the four remaining workers, to keep consumption up.

Then, the top men discovered that it was also cheaper if he outsourced the higher qualified personnel too. He laid off the remaining four workers.

For a reward, he was now paid 514 times as much as the others combined.

He then re-hired these four fired men to work in his credit card company, selling loans to all his nine former employees to keep consumption up. The foreigners who now produced and developed his cars lend him the money. What he couldn't borrow, he conjured up instead.

For a reward, he was now paid 734 times as much as the others combined.

Then the whole system came crashing down.

For a reward, he got to keep his 734 salaries. The silly nine work oxes who had to borrow to make ends meet were taxed for a rescue plan for the company.

Even this plan didn't seem to work. Now the top man got scared. A plan by the codename 'change' threatened to lower his income from 734 to 731 times as much as the others combined. He started writing alarmist mails to all his friends that those filthy thieving beggars were after his wealth.
He even demanded they'd be stripped of their vote. After all, his wealth was ample evidence that only men in charge like him know how to run a business responsibly.


Biff R. Miller III, Professor of Bollocks.

[Oleander Ardens]

A remarkable succint, beautifully constucted story about the inherent injustice of the taxsystem - with no resemblance in the Amercian reality.

[Xiahou]

Good parable. I had thought about posting it myself, but never got around to it. Glad someone did.

[InsaneApache]

Mine's a pint of Becks please.