Economics of Beer Drinking
Ten guys who were friends met at the local neighborhood bar to have a beer or two every Friday. They agree to pay the $100 bill in the same way they paid their income taxes.
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
Using this system, the men drank in the bar every Friday with no complaints until the owner threw them a curve..
"Since you are all such good customers, he said, I'm going to give you a discount and your bill will be $80.00 instead of $100.”
They couldnÂ’t divide the discount equally as that would be $3.33 each which would mean six of them would get paid to drink beer. So the bar owner, something of a mathematician figured it out roughly by percentages according to what each had been paying.
Now the fifth man joined the first four and paid nothing. A 100% savings for the fifth man.
The sixth man now paid $2 instead of $3. (33% savings)
The seventh man now paid $5 instead of $7 (28% savings)
The eight man now paid $9 instead of $12 (25% savings)
The ninth man now paid $14 instead of $18 (22% savings)
The tenth man now paid $49 instead of $59 (16% savings)
Each of the bottom four still enjoyed the benefit of paying nothing and every one of the other six was better off than before.
But the fifth man began to compare savings and complained that he only got $1 of the $20 discount while the tenth man got $10. That wasn’t fair. And the others also noticed that they got less of a discount than the tenth man and began to angry. Why should the richest guy get the biggest break? And the bottom four joined in the protest: “We didn’t get anything at all. The system exploits the poor.”
And they ganged up on the richest guy and accused him of all sorts of privilege and excess and greed and plotted how to get him to pay more of the bill.
The next Friday 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
(teaching attributed to) David R. Kamerschen, PH. D
Professor of Economics, University of Georgia
h and Somalia isn't Libertarian its in a war like state and has been for a long time. Militia's vs Militia's war lords vs war lords not even close to a Libertarian society.
