Chesterfield Posted March 23, 2012 Share Posted March 23, 2012 Just found this, although its been around for a while. Its quite a good analogy of our lovely tax system and how it works... 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 every day and seemed quite happy with the arrangement, until one day, the bar 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 realised 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 heroceeded 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 pound out of the £20 saving,†declared the sixth man. He pointed to the tenth man,â€but he got £10!†“Yeah, that’s right,†exclaimed the fifth man. “I only saved a pound 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?, Here we go again the rich getting 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. Quote Link to comment Share on other sites More sharing options...
Ekona Posted March 23, 2012 Share Posted March 23, 2012 Not the first time I've seen that, but it gets more true the more I read it. Quote Link to comment Share on other sites More sharing options...
Chris`I Posted March 23, 2012 Share Posted March 23, 2012 Nail. Head. Hit Quote Link to comment Share on other sites More sharing options...
rtbiscuit Posted March 23, 2012 Share Posted March 23, 2012 that makes so much sense, it helps alot to see it like that. i don't disagree at all Quote Link to comment Share on other sites More sharing options...
CaptainSensible Posted March 23, 2012 Share Posted March 23, 2012 Seem this many times before, but it illustrates the point brilliantly. Quote Link to comment Share on other sites More sharing options...
JetSet Posted March 23, 2012 Share Posted March 23, 2012 In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. +1. However, the rest of the world is not as tax friendly as it once was. http://www.businesspundit.com/12-countr ... tax-rates/ Pete Quote Link to comment Share on other sites More sharing options...
Chris`I Posted March 23, 2012 Share Posted March 23, 2012 So when are you off to Monaco then Chris? Quote Link to comment Share on other sites More sharing options...
Chesterfield Posted March 23, 2012 Author Share Posted March 23, 2012 Just need those six lucky numbers. Quote Link to comment Share on other sites More sharing options...
EH 370z Posted March 23, 2012 Share Posted March 23, 2012 Very clever .... the example not the process... Quote Link to comment Share on other sites More sharing options...
glrnet Posted March 23, 2012 Share Posted March 23, 2012 Is that because you're older and wiser or just richer? Mine's a pint please Dan, the other eight and I promise not to beat you up outside Not the first time I've seen that, but it gets more true the more I read it. Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted March 23, 2012 Share Posted March 23, 2012 When I lived in Sweden the standard rate was 35% and the tax on alcohol was unreal!!!! Luckily I don't drink Quote Link to comment Share on other sites More sharing options...
The Bounty Bar Kid Posted March 23, 2012 Share Posted March 23, 2012 I swear if fuel prices keep going up, I'm going to cut the bottom out my car and Flintstone it! Quote Link to comment Share on other sites More sharing options...
spursmaddave Posted March 24, 2012 Share Posted March 24, 2012 I swear if fuel prices keep going up, I'm going to cut the bottom out my car and Flintstone it! That' a great idea! Yabba Dabba Do It !!!! Quote Link to comment Share on other sites More sharing options...
docwra Posted March 24, 2012 Share Posted March 24, 2012 Stole this and posted on SXOC, almost exactly half of the people can understand it, the other half are saying that the 10th guy will be paid via dividend, that some other others will have tax credits, one will be working offshore ........ they are the 9 people that beat the 10th guy up I think Quote Link to comment Share on other sites More sharing options...
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