BAR STOOL ECONOMICS

Suppose that everyday,ten men gooutfora 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 $1.00 The sixth would pay $3.00 The seventh would pay $7.00 The eighth would pay $12.00 The ninth would pay $18.00 The tenth man (the richest) would pay $59.00

So that's what theydecidedto do. Themen drank in the bar everyday and seemed quite happy with arraignment, 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 $20.00. Drinks for the ten men now cost just $80.00

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 their fair share? They realized that $20.00 divided by six is $3.33. But if they subtracted that from every body'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 mans 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 nowpaid $9insteadof 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, shoutedtheseventh 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 whenitcame time to pay the bill, they discovered somethingimportant. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalist 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, andtheyjust maynotshowupanymore. In fact, they might start drinking overseaswhere the atmosphere is somewhat friendlier.

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

outstanding, and good thing I do not drink.