I have very few followers and I just might lose them all after publishing this. I found this article and would like to shake the writer's hand. I think it sheds like on America's current welfare state. We are living in a place where a sense of entitlement, "you owe me" attitude, and lack of responsibility is running rampant. There are far too many people oblivious to this trend and I'm afraid that soon it will be too late. Eventually we will be populated by less people willing to work and more people who don't work continuing to procreate. But, I digress.
Here is what I want you all read and think long and hard about what might happen if we continue down our current path and reward such thinking...
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.
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.
by David R. Kamerschen, Ph.D.
