Plan B Forum

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 ball.

"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 men would 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 realised 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 a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid £2 instead of £3 (33% saving).

The seventh now paid £5 instead of £7 (28% saving).

The eighth now paid £9 instead of £12 (25% saving).

The ninth now paid £14 instead of £18 (22% saving).

The tenth now paid £49 instead of £59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a pound out of the £20 saving," 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 pound too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get £10 back, when I got only £2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax 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 their 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 government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally 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.

the top two who pay almost nothing.

"Beer Tax" rate * 0.00% **** 1.25% **** 2.50% **** 3.50% ******* 3.00% ******** 0.45% ********* 0.15%


The real situation is more like the above in that all of them are contributing 2,000 hrs per year of their lives but the pay varies as seen and thus the 'beer tax" is reduced steeply for the top two who pay almost nothing.

rubato wrote:

The cynical brilliance of Republican rhetoric is they've got the middle four mad at the BOTTOM four by calling them "parasites and takers" to keep their attention off the ones who are really screwing them.


yrs,
rubato

Lord Jim wrote:

the top two who pay almost nothing.

So the two who collectively are paying 78.75% of the tab for all ten, (17.5% and 61.25% respectively) "pay almost nothing"...

And that children, is how rubenomics works...

rubato wrote:the bottom line is what matters; pointing to the dollar amount each is paying is just a way of concealing the fact that it is what you keep that is important.

Gob wrote:

rubato wrote:

The cynical brilliance of Republican rhetoric is they've got the middle four mad at the BOTTOM four by calling them "parasites and takers" to keep their attention off the ones who are really screwing them.


yrs,
rubato

He's actually thinking this is real, rather than a parable, isn't he? And that; "they've got the middle four mad at the BOTTOM four by calling them "parasites and takers" to keep their attention off the ones who are really screwing them. "

LOL!! What an active fantasy life he has...

Mitt Romney says half of Americans are immoral parasites who think they’re ‘victims’
September 18, 2012 by Fred Clark 243 Comments

The scoop seems to belong to David Corn of Mother Jones, “SECRET VIDEO: Romney Tells Millionaire Donors What He Really Thinks of Obama Voters“:

During a private fundraiser earlier this year, Republican presidential candidate Mitt Romney told a small group of wealthy contributors what he truly thinks of all the voters who support President Barack Obama. He dismissed these Americans as freeloaders who pay no taxes, who don’t assume responsibility for their lives, and who think government should take care of them. Fielding a question from a donor about how he could triumph in November, Romney replied:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.

Romney goes on to say that such moochers can never be convinced “to take personal responsibility and care for their lives.”

ETA: Oh, and I don't know about the UK...but in the US, who in the top 10% pays 59% of their income in taxes?

rubato wrote:


Mitt Romney thinks it is real:

it is the tax on your next dollar earned that you care about when you decide whether to work harder or be like Gob and go on another vacation.