The American Tax System

The way our tax system works....This explanation of how our tax system is "supposed" to work, comes from an Economics professor at the University of Georgia . I encourage you to take the two minutes to read this brilliant explanation, it is well worth the read.

Suppose that every day, ten men go out for beer and the bill for all tencomes 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 everyday 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 every one 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, 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

OK So that is how I got this e-mail.

This is what I think about it.

This is exactly the Rupublican viewpoint (that I have heard espoused) on this subject. They think unilaterally about it, that everyone is happy "drinking their beer" or living their lives until someone or something comes along that shows in stark contrast what the system looks like.

I think that this explanation, although theoretically true, is shortsighted. Being one of the first four who would be "drinking their beer" for free I want to put in a comment. I would rather be able to earn enough money to be able to support myself, then to have to rely on other people to pay for me. Having a system set up that "supports" me rather than allows me to support myself encourages me to either be lazy or to be stupid. Stupid in that I no longer take the initiative to find ways to support myself as well as I should. Or what if I could find a cheaper "beer" or make my own "beer?" OK I HATE BEER I AM GOING TO HAVE TO CHANGE THIS TO BE Kombucha Tea made with Roobios (an herbal red tea instead of Green tea which is caffinated). So I decied that it is better to drink Kombucha tea but I am stuck drinking beer because I sold my right to make my own decisions when I signed on to this "redistribution of wealth" idea. I say forget that idea, let us all make better decisions and if your stupid enough to believe everything you are told and to not fight for truth and your own individual freedoms then you should not deserve to be wealthy either. But if you are wealthy you also have the responsibility to encourage and teach others what you know. The whole "teach a man to fish instead of give a man a fish idea."

That said, I know there is more to my own personal development that needs to be done on this subject and it is an ongoing process. I know though fundamentally that I would rather be out there being productive and trying to take care of myself rather then sitting around blowing bubbles in my "beer" and letting someone else pick up the tab. Taking care of myself feels better.

~Strawberry Girl