Bar Stool Economics !
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Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they ...
August 3rd, 2008 10:48 PM
Bar Stool Economics !
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.
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
"The sword dose not cause the murder, and the maker of the sword dose not bear sin" Rabbi Solomon ben Isaac 11th century
August 3rd, 2008 10:48 PM
August 3rd, 2008 10:53 PM
Atlas Shrugged, but the common man shouldn't. Good read and a good reminder.
Your best weapon is your brain. Don't leave home without it.
How does disarming
the number of victims?
Reason over Force: The Gun is Civilization (Marko Kloos)
NRA, GOA, OFF, ACLDN.
August 3rd, 2008 10:55 PM
Now that is an analogy I can understand.
August 3rd, 2008 10:57 PM
Well, hooray free beer, I guess.
Seriously, makes you look at things a bit differently
August 3rd, 2008 11:24 PM
nuttin like bar economics
"Outside of the killings, Washington has one of the lowest crime rates in the country,"
--Mayor Marion Barry, Washington , DC .
August 4th, 2008 04:14 AM
obamanamics?or just plain demonamics?
"That I cannot do."
"Give this to, uh, Clemenza. I want reliable people, people who aren't going to be carried away. After all we're not murderers in spite of what this undertaker thinks."
Certified Glock Armorer
NRA Life Member
August 4th, 2008 07:58 AM
Yep... That is a great example. I love it!
"The gun is the great equalizer... For it is the gun, that allows the meek to repel the monsters; Whom are bigger, stronger and without conscience, prey on those who without one, would surely perish."
August 4th, 2008 08:45 AM
Who is John Galt?
Originally Posted by ccw9mm
August 4th, 2008 12:41 PM
great example saved for later use lol .
Make sure you get full value out of today , Do something worthwhile, because what you do today will cost you one day off the rest of your life .
We only begin to understand folks after we stop and think .
Criminals are looking for victims, not opponents.
August 4th, 2008 09:07 PM
Good example. mmmm...beer!
EVIL PREVAILS WHEN GOOD MEN FAIL TO ACT.
August 5th, 2008 09:30 AM
Don't forget that the tenth guy only drinks maybe 1 or 2 beers a night, but the first four or five drink a lot more. Its free, so why not?
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