So this is an email chain i got a few years ago, and below was my response. Its a bit crude and filled with typos but I think it would be intellectually dishonest if I edited it now. (more truthfully, i'm too lazy to go back and edit it now)
I have a bunch of back and forths from different people and i might post them later too.
This is the chain email.
Bar Stool Economics
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 20 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 educe 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.
For those who understand, no explanation is needed. For those who do not
understand, no explanation is possible.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia
and here is my enraged response to the person who sent it to me:
this is the dumbest thing i've ever seen on the internet... maybe dumber then the dont buy exxon gas.
First of all, Getting beers is not equivalent in the LEAST to the services of the Government. But lets say it was.
What this over educated under intelligent jerk didn't tell you was that they all still had to pay the $10 cover charge to get in the bar. (sales tax, property tax, fees, import tax... payroll taxes, you know all that other tax that isn't income tax?) did you forget about that Mr. University of Georgia?...
or how about the 11th guy, who pays the $10 but isn't allowed to have a beer because he has to cower in the corner and wash the dishes hoping no one notices him. (illegal immigrants who pay all the same non income taxes... (and some of them DO pay income tax))
Ignoring all that lets just stick to this Moron's idea.
Does everyone benefit equally from Government services. Do the first 4 guys who obviously make so little money that they can barely afford anything else (certainly not the beer), really get the same services as the richest?... does the poorest 4 get the same benefit from the police force? and law and order?... Really think about it. the 4 people who obviously have barely any possessions. if there was no police or a functioning economy those 4, maybe the 5th and 6 man... would really want some beer, and no way to get it... so they grab their guns (that the richest man demanded everyone keep) and head for the 10th man's house and they take what they want. Who's gonna stop them?.. the League of Extraordinary Rich Bastards?
So who loses the most when the poorest have slightly less then they have now, and no one to protect the streets?...
How about national defense? ... does the poor immigrant really care if we have 11 battle carrier divisions patrolling the world making sure "US interests" are safe?.. who's interests are those?.. guys 1 thu 7?... really ??????? (oh.. all of a sudden we're all in this together... shocking...)
Now of-course many government programs, education, and such benefit the poorest much more then the Richest (in the short term)... but as any economist will tell you (maybe not at the University of Georgia) there is always the long term. Pulling people out of poverty and enlarging and strengthening the middle class (thru education, and such) means that all productivity goes up and the pie (wealth) grows larger and faster then when the money/wealth is concentrated in the hands of so few.
Its like a poker game (i can dumb stuff down too... but mine actually fits the issue and isn't pulled straight out of my ass)
"As in a Poker Game where the Chips were concentrated in Fewer and fewer hands, the other fellows could stay in the game only by Borrowing. When their credit ran out, the game stopped."
- Marriner S. Eccles
moral of this story: "yay.. the rich people won.. they have all the money!!!"... But now the system has collapsed and no one is playing this game we call "the economy" anymore. Anyone else see a problem with that?...
The goal is not to END THE GAME!!!!!!.... its to keep the game going and have more and more people ENTER THE GAME... and create more and more wealth!!!!
now who loses more when the whole system collapses?... now really?... will the guys already living in poverty live in "worse" poverty?... maybe... but who's got the most too lose?....
Oh.. and one more thing... where did this ass (number 10) go?... he's just not gonna drink anymore?... he's gone off to some island where he has no one to work for him anymore?... he'll have to cook his own food, clean his own stuff, build his own shelter...yea sure.. i'll believe that when i see it.. cuz again .. THIS ISNT A BEER BUST... its SOCIETY!!!!!!! they would have to choose a new society... !!!!!
We all know they want to move to one of those Tax free lands.. like the Bahamas... yea.. rich people love LIVING! in 2nd world nations...... well how about one of the other 1st world nations...oh crap... all there taxes are higher for rich people... and they dont get to walk around acting as if the nation was built for them, and everyone else is just their on the rich people's personal kindness.
so shut the hell up drink your beer, and use that georgia education for 15 min and really think some of this crap thru.... Cuz the rest of us already use our City College education and figured it out back in 1939.
PB