The Franklin County Democrat
The truth for a change.Office: 6908 West Argent, Pasco, Washington
US Mail: PO Box 4883, Pasco, Washington 99301 USA
Email: news@franklincounty-dems.org
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The Franklin County DemocratThe truth for a change. |
Published by the Franklin County Democratic Central Committee Office: 6908 West Argent, Pasco, Washington US Mail: PO Box 4883, Pasco, Washington 99301 USA Email: news@franklincounty-dems.org |
| www.franklincounty-dems.org | Sunday September 05, 2010 | Weather at 13:22 PDT:  Fair, and 71 ° F. |
NEWS
EDITORIAL
OPINION
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How taxes work in the real worldBy David Chassin, Saturday November 08, 2008For years a parable about ten guys who drink beer together every day has been used to argue that taxes are bad. But nobody talked about what happened afterwards. Now we learn the rest of the story. 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.
For many that is the end of the story. But a few ask what happened afterwards. The answer is very instructive.
Having learned a lesson after borrowing enough money to pay their bill that night, the remaining nine continued to meet happily for years with two important differences.
Having lost a customer the bartender never offered them a break again. The ninth man never allowed the others to complain again.
But for the tenth man life was very different. Checking in with him a year later we find that being alone all the time he fell into a deep depression and began drinking at home. He became an alcoholic, went to jail when he killed a pedestrian while driving drunk, then lost his high-paying job, his mansion in the suburbs was foreclosed on, his beautiful wife left him, and his kids don't talk to him anymore.
The tenth man came to regret not doing what the ninth man was now doing. He realized only too late that he was the leader and he really wasn't entitled to anything at all. What he got for his generosity was intangible, but still valuable. He got a stable, free, and friendly group of friends who all agreed to the rules before they knew who was going to be rich and who was going to be poor. Without these rules, it was every man for himself and they couldn't get together for beers at all.
The formerly rich man finally realized that as a fortunate man he had to willingly give something back to those with less. Failing to do so destroyed the stable, free and friendly group that allowed them to all have beers together. That small price he paid in less savings preserved his status in getting a larger share of the returns.
He finally accepted the reality that not everybody can be equally rich and so fairness is not about getting equal share of the savings. It's about being able to share a beer with your friends.
Anything else would be communism. Send us your comments to Reader's Letters |
Featured LinksPresident Obama's 2010 State of the Union Address |
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Excerpts from President Obama's speech August 9, 2010