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  1. Standard member vivify
    rain
    14 May '14 16:33
    Very interesting:

    http://www.ijreview.com/2014/05/138011-tax-system-explained-beer-2/


    "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 ? 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 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 dollar 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 dollar 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."
  2. 14 May '14 16:53
    I'm putting all my retirement savings into buying cans of beer. That way Wall Street can't take it from me, I don't have to believe in the promises of government help, and I can recycle the cans and cash them in when I'm done.
  3. 14 May '14 16:57
    Originally posted by vivify
    Very interesting:

    http://www.ijreview.com/2014/05/138011-tax-system-explained-beer-2/


    "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 ...[text shortened]... more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier."
    An excellent explanation of our tax system.
  4. 14 May '14 20:01
    It's an excellent analogy. It would be much better to have people who earn $10k pay $50k in taxes. This would lead to a society where hard work is rewarded.
  5. Standard member finnegan
    GENS UNA SUMUS
    14 May '14 20:19
    Originally posted by vivify
    Very interesting:

    http://www.ijreview.com/2014/05/138011-tax-system-explained-beer-2/


    "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 ...[text shortened]... more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier."
    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.
    That sounds bad. Would that be in places like Cayman islands, Bahamas, Jersey, Switzerland? You know, the pirate islands where they already do hold much of their wealth and a lot of our's? Would that be like Amazon making £4.3billion in the UK last year and paying £4.5million in taxes? Would it resemble the 100 billionaires resident in the UK (but managing to not be here for tax purposes when that suits, and yet they are resident for some tax purposes when that suits - you know how they work.)
    Philip Beresford, who compiles the list, told the BBC "culture, financial services, nice tax regime, good education for their kids and a nice lifestyle where they meet their friends" were among the reasons billionaires were attracted to the UK.

    BBC financial correspondent Andrew Verity said the increase in the number of billionaires on the list undermined the argument that making them pay more tax would drive them away.

    This included efforts to impose capital gains tax (CGT) on property owned by foreigners who are not resident in the UK, said our correspondent.

    Rich List author Philip Beresford explains why the super rich love London
    In spite of the fact that many of Britain's richest people are "domiciled" abroad for tax purposes, many of the UK's 123,000 "non-doms" were resident here and so the measure did not apply to them, he added.
    http://www.bbc.co.uk/news/uk-27360032
  6. 14 May '14 20:29
    http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
  7. 14 May '14 20:39
    Originally posted by KazetNagorra
    It's an excellent analogy. It would be much better to have people who earn $10k pay $50k in taxes. This would lead to a society where hard work is rewarded.
    (1) It shows the dangers of the over extension of government into areas that the private market works better.
    (2) It shows how people who people who pay much less than their proportional share only see how those who contribute the overwhelming majority could always pay more.
  8. Standard member finnegan
    GENS UNA SUMUS
    14 May '14 20:54
    Originally posted by quackquack
    (1) It shows the dangers of the over extension of government into areas that the private market works better.
    (2) It shows how people who people who pay much less than their proportional share only see how those who contribute the overwhelming majority could always pay more.
    Quackquack, do you really not understand the comment you were responding to?
  9. 14 May '14 21:15
    'The (US) Tax System Explained in Beer'

    So that's why tax evasion increased during Prohibition (1920-1933)!
    Al Capone was convicted of tax evasion, not his many other reputed crimes.
  10. Standard member finnegan
    GENS UNA SUMUS
    14 May '14 21:26
    Originally posted by Duchess64
    'The (US) Tax System Explained in Beer'

    So that's why tax evasion increased during Prohibition (1920-1933)!
    Al Capone was convicted of tax evasion, not his many other reputed crimes.
    The treatment of Al Capone also taught the mobs a lesson and resulted in the migration of their money offshore - initially to the Bahamas. The offshore finance industry has not looked back.
  11. 15 May '14 05:42
    Originally posted by quackquack
    (1) It shows the dangers of the over extension of government into areas that the private market works better.
    (2) It shows how people who people who pay much less than their proportional share only see how those who contribute the overwhelming majority could always pay more.
    1) If the private market works better, the private market should do it. This is a trivial tautology that practically everyone will agree on.

    2) It does not and that's generally not true, anyway. Many of the contributors here on RHP are among the lower half in income, yet resoundly support making taxes in the US less progressive.
  12. 15 May '14 08:08 / 1 edit
    Originally posted by vivify
    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."
    Of course you conveniently omitted many important aspects of the tax system.
    1. Many taxes such as sales tax disproportionately affect the poor.
    2. The rich man cannot choose not to show up for beer.
    3. The poor men actually get much smaller glasses of beer.
    4. The rich man maintains his wealth by exploiting the others.
    5. Some countries use the tax to benefit the poor, others use it to benefit the rich, so looking at only the amount you pay in taxes is only part of the picture.
    6. We should not pander to rich men who pay for their drinking overseas whilst still drinking the local beer and benefiting from the proceeds of the beer sales.
  13. Subscriber Wajoma
    Die Cheeseburger
    15 May '14 08:19
    Originally posted by vivify
    Very interesting:

    http://www.ijreview.com/2014/05/138011-tax-system-explained-beer-2/


    "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 ...[text shortened]... more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier."
    You got it Vivify, the tax system and democracy explained. The rich guy is in a minority here.

    I'd like to buy that man a beer.
  14. Standard member finnegan
    GENS UNA SUMUS
    15 May '14 09:17 / 1 edit
    Originally posted by Wajoma
    You got it Vivify, the tax system and democracy explained. The rich guy is in a minority here.

    I'd like to buy that man a beer.
    Yes these childish metaphors appeal to Americans for a reason and it is not because they produce valid understanding (the opposite - they just add to your confusion about issues that merit a lot more thought) but maybe because demagogues have learned how to manipulate a gullible and poorly informed electorate:
    It’s long been known that America’s school kids haven’t measured well compared with international peers. Now, there’s a new twist: Adults don’t either. In math, reading and problem-solving using technology – all skills considered critical for global competitiveness and economic strength – American adults scored below the international average on a global test, according to results released Tuesday. Adults in Japan, Canada, Australia, Finland and multiple other countries scored significantly higher than the United States in all three areas on the test.
    http://nypost.com/2013/10/08/us-adults-are-dumber-than-the-average-human/
    All agencies, companies, and organizations have an enormous stake in the problem of limited literacy. It does no good to write in plain, clear language if it is written at the wrong grde level. Too many government Web sites, legal notices, health and safety information, and other crucial documents are often written at a level too difficult for a large the population.

    For these reasons, experts recommend writing documents intended for the general public at the 9th-grade level, health and safety information at the 5th-grade level. Knowing the average reading level of your audience, however, is not the same as writing for that audience. That takes study, practice, and discipline. It is very difficult to write for a class of readers not one's own. One must become aware of the reading habits and the types of documents with which your audience is familiar.
    http://www.impact-information.com/impactinfo/literacy.htm

    [Pity this site needs to improve its proof reading - lot of errors!]

    It seems like political arguments are best aimed at fifth grade level on this forum.
  15. Subscriber Wajoma
    Die Cheeseburger
    15 May '14 11:39
    Originally posted by finnegan
    Yes these childish metaphors appeal to Americans for a reason and it is not because they produce valid understanding (the opposite - they just add to your confusion about issues that merit a lot more thought) but maybe because demagogues have learned how to manipulate a gullible and poorly informed electorate: [quote]It’s long been known that America’s scho ...[text shortened]... rs![/i]]

    It seems like political arguments are best aimed at fifth grade level on this forum.
    The metaphor applies to a great many countries and appeals to many independent thinkers of many nationalities.