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

[Hellfighter]

I was just thinking something else...

Rich guy number 10 will never get beat up...
He pays for lavish free shots for number 9 and 8 guys to look after him.
Guys 9 and 8 don't do that work -they get guys 7 and 6 to work out the gritty task.
Guys 6 and 7 split guys 1-5 up to fight amongst themselves.
Guy 10 is smug with his genius and peacefully sits in his booth sipping his 'refreshments'.

For the record- I don't want to come of as a leftie extremist- I personally know some filthy rich people who do donate and get involved in helping for charitable causes -not just financially but timewise too. But thems the exceptions. And as Hamma pointed out someone at the top is getting more and more obscenely rich as times go by... this surplus of money doesn't appear out of thin air of course - it is being taken away from the poor worker who typically has no choice but to accept being ripped off.


This post has been edited by Hellfighter: 06/04/08 11:40am

[Blitz]

this surplus of money doesn't appear out of thin air of course - it is being taken away from the poor worker who typically has no choice but to accept being ripped off.

I did not know there was a set number of wealth around and that if someone gets more money that it must be taken from someone else?

What happens when the population changes, a new invention like the computer, or a new industry is created? Does that mean that someone else must lose?

I agree with the CEO salaries, they are doing this because we (as a consumer) allow for poor quality disposable products, thus allowing compainies to shop their work to the cheapest quality and labor they can find.
The big 3 did that for years and they are reaping what they sowed. Anyone remember the cars of the late 70's and early 80's?

Also Labor like everything is about supply and demand, in the late 60's thru now there was a huge increase in domestic labor (I.E. a lot of women went to work) Add in the opening of the China Market in the 70's and now illegal imegrtion spikes and we have a huge surplus of workers.

We have also increased in technology to allow for automation, communication with worldwide and country wide suppliers, and ways to simplify tasks that were done by people working in a trade and you drive the labor cost (I.E. salaries) down.

That's why Plumbers, masons, electricians, mechanics are still payed well they have not been driven down by all of these economic pressures.

The answer is to not hide in a shell and not wish for change, if it was we would still be asking "mabell" to patch us thru on the switchboard when we called somone.

We should be using our buying habits to buy High Quality American Made products, and offering tax incentives to companies that are building new technologies and products that create skilled manufactring jobs.

[Hellfighter]

this surplus of money doesn't appear out of thin air of course - it is being taken away from the poor worker who typically has no choice but to accept being ripped off.

I did not know there was a set number of wealth around and that if someone gets more money that it must be taken from someone else?

What happens when the population changes, a new invention like the computer, or a new industry is created? Does that mean that someone else must lose?

..............

Seems to me someone else is losing to help in bloating CEO salaries.... and that someone else is on the bottom rung of things. Something like Computers/high tech industries though you make a good point -all of Bill Gate's workers aren't exactly starving - but I did get ripped of buying Windows Millenium back in the day.

Regarding illegal immigration worker surplus -aren't most of the jobs they do the ones that noone else wants to do at the pay employers push on them.


This post has been edited by Hellfighter: 06/04/08 6:27pm