Bar Stool Economics Options

[Robert]

I'm sure this overly simplified but at the same time reasonably accurate.
I though it was an interesting look at our tax system.








Our Tax System Explained: "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 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, ladies and gentlemen, 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.

David R. Kamerschen, Ph.D.
Professor of Economics University of Georgia

[Genocide Junkie]

I'm sure some won't like this but that's never stopped me before... I think we've unionized our country right out of work. It's simply not good enough anymore for the average family to live like an average family. It's gone way beyond making working conditions safe and IMO crossed the line into pushing themselves right out of work. Goodyear was a huge employer here. As the unions kept striking and pushing for more and more and more Goodyear finally shut it down. They have since reopened part of it but they were paying uneducated and unskilled workers crazy high wages with great benefits. I'm not saying people shouldn't be paid enough to live comfortably. The difference today from 1950 is that Joe Blow now has a mortgage he can't pay, new cars he can't pay for, and credit cards he's maxed out. So they push for more and more and more. Maybe it's different where you live but here they've pushed jobs straight to some guy in Central America..... Companies are in business to make money. When it becomes cheaper to build it somewhere else, ship it halfway across the world, pay tariffs on it AND they don't have to worry about workers striking I understand why we lose our jobs. So now here where we have a favorable unemployment rate (from a prospective manufacturers point of view), favorable location in relation to the closest major cities, and a good infrastructure we not only can't attract new businesses but the current one's are running away. In large part because the town is "union". Perhaps it's time we look at ourselves to adjust our way of life and not for our country or our employers to bail us out because we're living above our means.