Our Tax System Explained: Bar Stool Economics

The following is attributed to David R. Kamerschen, Ph.D., Professor of Economics, University of Georgia. I received it by e-mail and have forwarded it several
times, but I still believe it is relevant and because of it's simplicity is the best arguement for tax reform I have seen.

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. 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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

More on Perception vs. Reality

Coincidentally, I was listening to Mark Levin's radio show earlier and Sean Hannity called in. During the course of their conversation they both asserted that they do not question Barak Obama's citizenship and have both said as much on their shows, which further validates the point I am trying to make - the only people who think this is an issue to Reagan Conservatives are those who get their information about Conservatives from ultra-left-wing sources.

Perception vs. Reality

I have received several e-mails and other communications that indicate that an alarming amount of people formulate their opinions about Conservatives and what we are about by how we are portrayed by extreme liberal outlets such as MSNBC, the Daily Kos, the Huffington Post, and the fraudulent posturer Michael Moore.

A perfect example of this is the constant harping on the Birther topic, which attackers of the Conservative movement seem to think is sacred to our doctrine when in fact we all know that this is a total non-issue for mainstream Conservatives. The attacks that I have seen on people like Sarah Palin and Bobby Jindal are completely baseless, and the constant attacks on Conservative commentators like Rush Limbaugh generally involve taking short sound bites completely out of context.

Another great example is the vociferous excoriation of Bill O'Reilly, who probably has more journalistic integrity than anyone out there. I have said this before - I have seen e-mails to Bill that blasted him for being too far to the left and too far to the right on the SAME STORY. I think that if some of the O'Reilly haters actually read his books and watched his show they might find out that they have a lot more in common with him than they ever would have thought.

When the State controls the media they can force-feed the population whatever they wish to propagate. The sycophantic liberal media in this country sucks up to to those who give them access and support their worldviews. Those who reject Fox News and conservative talk radio out of hand need to re-evalaute their stance; most mainstream media outlets these days are parroting liberal talking points. The Wall Street Journal is a bastion of journalistic integrity that is ignored by the legions who get their worldview from the New York Times and/or Washington Post, among others.

Crosby and Nash

Two great YouTube videos of David Crosby and Graham Nash, circa 1970. (These links will redirect you to YouTube, you will need to use your browser's Back button to return to this blog)

http://www.youtube.com/watch?v=zdNO9Qa5rzI&feature=related

http://www.youtube.com/watch?v=LPvOTVVbMko&feature=related

To quote a friend, YouTube is like crack for music junkies!!

Saints!!

Yes, we lost to the hated Cowgirls, but we will be OK. We have had more than our share of injuries but we should have some guys back for the playoffs. Going 16-0 is not important - just ask the '07 Patriots. This season has been a blessing for New Orleans and we are a team of destiny.

The Death of Common Sense, Part 1

Three Navy SEALS - who, for those who don't know, are among the very best of the very best in the American military and are more highly trained than almost anyone on earth - are about to go on trial for the supposed abuse of the prisoner Ahmed Hashim Abed, who masterminded the killing and mutilation of American contractors in Iraq.

This is wrong on so many levels I don't even know where to start, but I will open with the tidbits that 1) This guy was not in American custody for the entirety of his capture, which would violate the chain of custody rules in any (liberal) American courtroom; and 2) The Al-Quaida training manual specifies that anyone captured by Americans needs to scream that he was tortured, beaten, and otherwise mistreated by our troops, as they know that the politically correct dimwits that have been making the rules in this country would rather prosecute our own troops than see a terrorist scumbag get a bloody lip (see this case as an object example).

There are people in this country who view the unfortunate actions by a misguided few at Abu Gharave as torture. This stuff makes me sick; I will say for the first time (on this blog) but certainly not the last that political correctness will be the death of this country.

I'm back

Obviously I have been remiss and neglectful in maintaining this blog. I hate to say it, but the events that are taking place in this country have overwhelmed me to the point where I have not known where to start. But I think that it is important to get some messages out, so here I go again...