Oldie but Goodie: How Taxes Work

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[/code]

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[COLOR=black][COLOR=black]
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. 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.[/COLOR][/COLOR][/COLOR][/SIZE][/FONT]

Awwww, awwww, bidgle biddwe iddwe biddwe booo.

Ok... that was... errrr.... random.

What's on your mind, dude?

He lives in the basement of one of the first four men in your story, and doesn't like any new thoughts that challenge his preconceived notions of How The World Is.

It's a bit like fat people getting angry when someone points out it is their own fault for being fat.

Ah.

Idiots.

How eloquent.

EDIT: Nice edit to your first post.

Seriously, what's wrong?

This is one of those "I agree with you on principle, but no" situations.

Yes, flat taxes are so manifestly unfair!

Liar.

Well, I thought the "go fuck yourself", was a bit much.

I think the condescending baby talk was enough of a whole-arm-into-it whip snapping slap across the face.

Punctuating with "go fuck yourself", while selfishly satisfying on my end, was just excessive as well as redundant from an artistic standpoint.

These things need to be economized.
I usually sort these considerations out before I hit send, but sometimes I get excited, or lazy, and an incomplete draft makes it through.

My apologies.

Yes.

No, not so much, actually.

It was about as effective as pulling your own pants off, sitting on the linoleum, then taking a huge shit and rolling in it.

Plus, it's YOUR kitchen, not mine.

So, disturbing, creative (sort of), but ultimately mis-directed and self-defeating.

Oh, and stupid.

I think your point of failure was when you didn't leave things "artistic" to, you know, artists. You amateurs and dabblers tend to make that sort of mistake all the time.

Malfunctioning "Brain to Fingers" filter will fuck you every time.

Eh, forget about it. It's no biggie.

Now see, there's a post that could do with some economizing.

A simple "yes daddy *pee-pee kiss*", would have sufficed.

Well, I hear that you're the expert on the "daddy pee pee kiss", so I'll take your word for it.

They're not unfair, they just generate insufficient revenue. I'm sure the answer would be "spend less", but that's never happened in the entire history of man. Roads need maintenance, armies need payment. The lower classes have been historically brutally oppressed and this has led to savage poverty if not outright revolution and unrest.

Tch, had to take a sweet family thread, and slum it up, didn't you?

You fired the first shot, my friend.

Don't hate me for defending myself against your savage, unprovoked aggression.

Do you really think 40% of the adult population doesn't pay taxes Sean? And since the highest income tax bracket isn't anywhere near close to 59% I can only imagine the example is based on revenues generated in which case even a flat tax would cause such lopsided tax revenues.

Does the above story also take into account the tax shelters the richest guy uses to cut down the amount of tax he pays?

The only way a sales tax plan is fair is if it charges the same percentage of tax on every item.

I'm for zero income tax, and a consumption tax on everything else.

Shouldn't tax work as a percentage of income?

That seems fairer.

Why?

Depends on your definition of "fair."

[Libertarian]

No taxes!!!!! EVER!!!!!!!

....for me...

[/]

Say you have a millionaire and someone living in poverty.

Each of them has to pay $100 tax.

Sure that's great for the millionaire, but the poor person is screwed.

If it was 1% or something instead, the poor person would pay $1 and the rich person would still only pay a maximum of $199, the rich person would still barely notice and the poor person is able to get by.

There is a cure for Dickynoo. It's the 'ignore' function.

Works like a f'n champ!

We have what I proposed right now, except for income tax part.
A consumption tax as a percentage of the purchase price.
(sometimes called Sales Tax, or VAT etc)

Just raise the consumption tax by x% and be done with income tax.

What's the problem?

If you consume more, you pay more tax. A rich person will generally consume more anyway by virtue of having more money.

You want to make exceptions? Like what? Don't tax food?