Bar room economics....

[anthony]

This was just sent to me via email....thought it was worth posting. Should provoke some interesting thoughts and posts.


Bar
Room 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. 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.

[esangler]

that's why I drink bourbon...

[shoefish]

I love it!

And here is the response I'd get if I showed that to folks here in Cabridge...
....yeah, but the rich guy is rich, he really doesn't NEED that money like the others do. It makes sense for him to pay more than everyone else.

[anthony]

that's why I drink bourbon...

It's worse when we drink bourbon.....that's why we pay for all of CL's

[phrog46]

I am glad you posted that...it puts it into perspective, well for me anyway

[Anthony of the ARK]

This is great im going to show this to my Econ professor next class.

[esangler]

It's worse when we drink bourbon.....that's why we pay for all of CL's

I will try to get this figured out during Happy Hour at Mallard's tomorrow

[boatliftman]

funny how that works

[Deep C]

Mini Deep recently announced she was crossing over to the democrat side. I saw she had an "A" in a particularly hard class at school. I asked her how her friend did... "Oh she got a "C""
"Ok... Heres what you do. Go to the teacher tomorrow and ask her to average you and your friends grade to make you both a "B""
"What? I worked too hard for that "A". I earned it. She was lazy and didn't earn part of my hard work."
"Good honey... Glad to see you're still a republican..."

As for drinking overseas... Not too far from being a logical choice come retirement time. No income tax in the Bahamas... Food for thought...

[Erens Addiction Too]

As best put by George Thorogood - I Drink Alone!