The tax system explained in beer
#1
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Sorry if this is SIAL, but i don't remember seeing it here, and based on some of the discussions that go on, I thought it particularly apt ![Wink](https://www.scoobynet.com/images/smilies/wink.gif)
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"Suppose that once a week, 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.
And the tenth man (the richest) would pay £59.
So, that's what they decided to do.
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly 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 realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided 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 (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got £1 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 £1 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 only got £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 week 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 to pay 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 might 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
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.
And the tenth man (the richest) would pay £59.
So, that's what they decided to do.
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly 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 realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided 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 (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got £1 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 £1 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 only got £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 week 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 to pay 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 might 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
#5
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Where does it include,
Offshore Vats of Export Beer
Paying some of the Beer to his wife
Saving masses of Beer tax free for his retirement
A creative Beer accountant to make sure he can drink extra
The Four pints he didnt declare that he had on the way there
Buying his own Beer for own as a Business Expense to bring his tax bill down
Beer Dividends
It isnt as simple as the example.
Offshore Vats of Export Beer
Paying some of the Beer to his wife
Saving masses of Beer tax free for his retirement
A creative Beer accountant to make sure he can drink extra
The Four pints he didnt declare that he had on the way there
Buying his own Beer for own as a Business Expense to bring his tax bill down
Beer Dividends
It isnt as simple as the example.
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It's all them cheap foreign beers coming over here & taking the place of good old English pints that's causing the problem!!!!!!
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#10
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you have been here for 5 years and do not know?
i refer you to the quote above:
(well actually it means Subaru In A Lake - a picture of a subaru crashed in a lake that has been posted thousands of times - therefore SIAL = Been posted (many times) before)
i refer you to the quote above:
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
For those who do not understand, no explanation is possible
Last edited by jjones; 24 November 2010 at 10:05 PM.
#11
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Where does it include,
Offshore Vats of Export Beer
Paying some of the Beer to his wife
Saving masses of Beer tax free for his retirement
A creative Beer accountant to make sure he can drink extra
The Four pints he didnt declare that he had on the way there
Buying his own Beer for own as a Business Expense to bring his tax bill down
Beer Dividends
It isnt as simple as the example.
Offshore Vats of Export Beer
Paying some of the Beer to his wife
Saving masses of Beer tax free for his retirement
A creative Beer accountant to make sure he can drink extra
The Four pints he didnt declare that he had on the way there
Buying his own Beer for own as a Business Expense to bring his tax bill down
Beer Dividends
It isnt as simple as the example.
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It is simple, those nine that are left just need to borrow more money, put it on the bar tab, and keep doing it on every visit, everyone gets their beer and everyone is happy all round and the tab is getting bigger and the barman "knows" their "word" is as good as money and will pay it all back.............we don't need that well paid tenth patron...............
#14
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You missed out the line..........
"They realised they were all drinking pi$$y weak lager,so decided to beat themselves up"..
Good read though,although in the real world its usually the skint members that get the beer in,while the guy with a few quid does the round dodging...
"They realised they were all drinking pi$$y weak lager,so decided to beat themselves up"..
Good read though,although in the real world its usually the skint members that get the beer in,while the guy with a few quid does the round dodging...
#19
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Kinda pertinent:
http://www.dailymail.co.uk/news/arti...-combined.html
http://www.dailymail.co.uk/news/arti...-combined.html
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Entertaining as it might be (to some
), where this oft-rehashed piece falls down in quite a bit way is that it only takes into account income tax, despite this only making up some 35% or so of total government revenue (the remainder coming from VAT, fuel, alcohol, tobacco and other duties, NI contributions, etc).
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#23
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My apologies, but 'acquiring' wages just comes across as getting something for nothing. 'Earning' something, to me, seems far more rewarding.
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So we're saying that the Czechs pay the most tax? http://www.telegraph.co.uk/finance/n...-the-most.html
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