[BengalTiger]

Here's the fiction:

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, boys and girls, 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

And here's the fact:

http://www.reuters.com/article/rbssEnergyNews/idUSL312427120090312?feedType=RSS&feedName=rbssEnergyNews&rpc=22

[The E]

So......A progressive income tax is.....bad? (Well, actually, yes it is.)
Publicly traded companies trying to evade taxes maximize their shareholder value are....evil?

What has that got to do with the US President?

[Rick James]

So......A progressive income tax is.....bad? (Well, actually, yes it is.)
Publicly traded companies trying to evade taxes maximize their shareholder value are....evil?

What has that got to do with the US President?

I think it's designed to highlight how the president will either have to bow down or compromise with the big companies in order to create a "mutually equitable solution".

[The E]

That wasn't my point, actually. The Beer-Story is an analogy for the way income tax reductions work, the news article is about companies trying to evade the US tax system. Then there's the name "Obama" thrown in via the thread title. I, for one, don't see the connection.

[Polpolion]

Here's the fiction:

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, boys and girls, 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

And here's the fact:

http://www.reuters.com/article/rbssEnergyNews/idUSL312427120090312?feedType=RSS&feedName=rbssEnergyNews&rpc=22

That is a stupid analogy. And a terrible way to break up the price of beer. Fortunately for out society, we don't pay our taxes in beer.

[karajorma]

As I pointed out last time this story was posted the solution to the beer story was for the barman not to reduce the price of the beer but to use the money to send the guys some chips. That way everyone would have been happy.

Of course that's just socialism.

[FUBAR-BDHR]

You left out the the one with a wife and kids who gets money back for drinking beer from the single guy down the bar.

[Terminator]

WTB FairTax

[Blue Lion]

I'll hold my breath waiting for the day rich people stop trying to be rich.

It'll be any day now, I'm sure.

[tinfoil]

*tinfoil watches Blue Lion slowly asphyxiate

[Blue Lion]

We've had a progressive tax system since... 1913 was it?

Have all the rich people left? No? Shocking.

Has their income dropped off seriously because no one wants to pay the higher tax bracket? No? Amazing.

Has the gap between the "rich and super rich" and "everyone else" closed considerably as it no longer pays off to be rich? No again? This is silly.

The "we'll take our ball and go home" threat is just that, a threat. This is just another trickle down economics. "Give us more money and we'll promise you'll get some. We can't possibly hold it all."

The upper percentiles make more money now compared to everyone else then they ever have and they want more or they'll leave? Door is to your left.

[Polpolion]

I solemnly swear to all of HLP, that if I ever become "rich," I'll happily pay my taxes, just to spite all the other rich people *****ing about being taxed.

[Blue Lion]

I would gladly suffer the injustice of paying more on my 6 or 7 figure income so those more well to do people can be paid lower, more appropriately taxed salaries.

[Kosh]

Here's the fiction:

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, boys and girls, 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

And here's the fact:

http://www.reuters.com/article/rbssEnergyNews/idUSL312427120090312?feedType=RSS&feedName=rbssEnergyNews&rpc=22

There are so many loopholes in our tax codes that large corperations hardly pay anything, I remember a story a few years back of Portland General Electric only paying $5 in taxes for the whole year.


But you know, big companies' stranglehold on our political system is one of the ways we got into all the messes with healthcare, finances, and energy that we have today.

[General Battuta]

I'm curious. Looking at our history, doesn't it seem like we have a fairly average level of corporate involvement, and a relatively low degree of corruption?

Seems like we're doing better than ever.

[FUBAR-BDHR]

I'm curious. Looking at our history, doesn't it seem like we have a fairly average level of corporate involvement, and a relatively low degree of corruption?

Seems like we're doing better than ever.

Thanks now I have to clean the beer off my monitor that just came out my nose........

[General Battuta]

I'm curious. Looking at our history, doesn't it seem like we have a fairly average level of corporate involvement, and a relatively low degree of corruption?

Seems like we're doing better than ever.

Thanks now I have to clean the beer off my monitor that just came out my nose........

No, seriously. Look back at how things used to be. East India Company? Oil interests? Corruption in the early 20th? Government used to be a lot more corrupt than it is these days.

It does take some effort to step outside our own heuristics, but...a case might be made.

[Blue Lion]

I'm curious. Looking at our history, doesn't it seem like we have a fairly average level of corporate involvement, and a relatively low degree of corruption?

Seems like we're doing better than ever.

Thanks now I have to clean the beer off my monitor that just came out my nose........

No, seriously. Look back at how things used to be. East India Company? Oil interests? Corruption in the early 20th? Government used to be a lot more corrupt than it is these days.

It does take some effort to step outside our own heuristics, but...a case might be made.

And that is not due to the efforts of big business or the rich.

[General Battuta]

Hrm?

[Nuke]

things have been great since we decided to call corruption lobbying.