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When it comes to taxes, finances, economics, I'm not all that bright.  So when I received the email that's going around now from Repub types.  I know it's flawed, but I am at a loss as to how to respond in a thoughtful and knowledgeable way.    This email gives a hint at the propaganda that is coming as we approach the "fiscal cliff."    I would appreciate any thoughts, arguments, etc., in response to this email printed below.   Perhaps others have received it as well.   Thanks for your help.

Suppose that every day, ten men go out for a 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 $1.00
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

So that’s what they decided to do.
The men drank in the bar every day and seemed quite happy with that 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 $20.00."
Drinks for the ten men now cost just $80.00.

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 their “fair share?”

They realized that $20.00 divided by six is $3.33.

But if they subtracted that from everybody’s share, then the fifth 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, 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 union.
“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 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.

Kevin Fox, PE
Fox Ceramic Tile, Inc
916 East Jesuit Lane
PO Box 97
St. Marys, KS  66536
785-437-2792/fax 437-6008
kevin@foxceramictile.com
NTCA State Director
NTCA Methods and Standards Committee

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Comment Preferences

  •  Tip Jar (3+ / 0-)
    Recommended by:
    Michael James, Heianshoka, MKSinSA

    Anyone who isn't confused doesn't really understand the situation. - Edward R Murrow

    by gc10 on Fri Nov 09, 2012 at 08:13:44 AM PST

  •  Put down the beer, pick up a book. nt (5+ / 0-)
    •  You are correct! (0+ / 0-)

      But, I don't drink, and I am a prolific reader.  Alas, when it comes to this I am clearly not reading the right stuff!

      Anyone who isn't confused doesn't really understand the situation. - Edward R Murrow

      by gc10 on Fri Nov 09, 2012 at 08:53:54 AM PST

      [ Parent ]

  •  Basically, the counterargument is (7+ / 0-)

    that during all this time of Bush tax cuts the following should have happened according to supply siders:

    The first four men (the poorest) would be employed and have shifted into either the $3 or $7 category
    The fifth, sixth & seventh men would have benefited through upward mobility and be paying between $7 and $18
    The eighth would now be rich and also pay $18
    The ninth & tenth men (the richest) would be paying $59 but be richer than Gates, creating so many jobs the first four men would be constantly gaining in salary & socio-economic status, buying all sorts of goods and making everybody at the bar richer by the day.

    But that didn't happen.

  •  How did the rich guys get rich? (1+ / 0-)
    Recommended by:
    MKSinSA

    Oh yeah,they paid their workers nothing.

    "George RR Martin is not your bitch" ~~ Neil Gaiman

    by tardis10 on Fri Nov 09, 2012 at 08:31:26 AM PST

  •  It's a tautology (8+ / 0-)

    Per wikipedia

    using different words to say the same thing, or a series of self-reinforcing statements that cannot be disproved because they depend on the assumption that they are already correct
    So, they concoct these fanciful stories that are constructed just so that the moral they want to get across seems self-evident.  

    They could have started it off by saying: "Suppose that every day, ten men go out for a beer and four of them are lazy moochers who are not only parasites, but also too selfish to realize how hard their betters are working" but that would be too obvious.

    There is no good way to dive deep into this fantasy world and counteract it directly.

    If you are going to reply, might be best to try something like:

    A union employee, a member of the Tea Party and a CEO are sitting at a table. In the middle of the table there is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the tea partier and says,"look out for that union guy, he wants to take your cookie.
    For any thinking people who actually want to discus the role of taxes, we first need to establish what taxes are for.  They are not "punishment" for success or reward for slothfulness.  They are the price we pay to live in a civilized society.

    Airports, roads, police and fire departments, the court system, etc. all cost money. Since the wealthy benefit a lot more from all of these things, they should probably pay more than people who have little or no money. I mean, when was the last time a homeless person filed a patent lawsuit or needed 10 fire trucks and 5 ambulances to respond to a fire at their warehouse or needed $20 million in tax abatements in exchange for building a new store?

    "Why do we see the same old Republicans all over the news all the time when they were kicked out for screwing everything up?" - socratic's grandma

    by Michael James on Fri Nov 09, 2012 at 08:32:10 AM PST

    •  THE MONEY RESPONSE!!! (1+ / 0-)
      Recommended by:
      Michael James

      Great job!

      It's obvious that such a simple-minded, pre-crafted comparison would be bunk; but intellectuality trashing it is not as easy as it may seem.

      Aldus Shrugged : The Antidote to Ayn Rand. Tear Ayn, the GOP, and Fox News new orifices; laugh and enjoy. @floydbluealdus1

      by Floyd Blue on Fri Nov 09, 2012 at 08:50:21 AM PST

      [ Parent ]

  •  Suuuure, tenth man went to UAE (1+ / 0-)
    Recommended by:
    tardis10

    Here's the fallacy.  It assumes that the tenth guy hadn't already taken money from each and every one of the other guys.  

    It assumes that the cab ride there wasn't already spit 10 ways. NO REFUNDS FOR POOR!

    Apparently this also takes place in a Republican fantasy world where violence is immediately resorted to the poor.

    In other words, this starts with a false premise (Everybody plays by the same rules) and ends with a falser one (The rich guy can take his ball and go home with no consequences for him.)

    I don't blame Christians. I blame Stupid. Which sadly is a much more popular religion these days.

    by detroitmechworks on Fri Nov 09, 2012 at 08:32:18 AM PST

  •  Oversimplification failure (0+ / 0-)

    The best and closest you can get to simplifying a taxation and expenditure explanation is to use the family budget and even THAT is wrought with problems:

    Two spouses share bills and are independently minded, so they have separate checking accounts although they have a joint account for bills.

    Woman is a doctor and makes 500,000 per year
    Man is a police officer and makes 40,000 per year
    Kids are unemployed and make nothing except the occasional mowing the neighbors lawn job

    The kids, who earn little to nothing are the poor. They will receive the benefits of the family budget paid for by the top earners.

    But here's where it gets tricky -- is it fair for the husband to pay more than an equal share of the bills especially the mortgage? What about if the wife decides she wants the family to live in a larger nicer home that the husband could never in a milliion years afford on his salary?

    Obviously, the wife SHOULD pay more.

  •  Point at the Cretaceous Ash Cloud (0+ / 0-)

    that's coming right at those folks and tell them what Rachel said: (paraphrasing heavily here)
    "See that dust of extinction heading at ya? That's happening.".
    I just laugh at that crapulence nowadays.
    It just worked sooooo good for them last Tuesday, didn't it.
    Tell 'em they LOST and LOST big.
    They're just a clan of funny, little, vocal but voiceless people, now.

    "You're a dedicated swallower of fascism." Billy Bragg

    by Heianshoka on Fri Nov 09, 2012 at 08:33:47 AM PST

  •  To stay within the analogy, (5+ / 0-)

    just say that the tenth man is drinking 80% of the beer, but he's only paying $60. The first four men have barely a sip each, etc.
    http://www.motherjones.com/...

  •  Thanks!! (0+ / 0-)

    These comments are VERY helpful.  I appreciate them.  I do have a post doctoral education, but I'm old and I don't think as quickly as I once did.   I know that some of my friends have also received this BS and all of you are helping to "arm" all of us.  

    Anyone who isn't confused doesn't really understand the situation. - Edward R Murrow

    by gc10 on Fri Nov 09, 2012 at 08:51:42 AM PST

    •  You might also point out that this scenario (0+ / 0-)

      is laughably inaccurate. The ninth and tenth guys would NEVER be hanging out with most of the rest. They'd also be drinking exotic microbrews the commoners never taste while being served by bikini-clad models at poolside. No way they're going to be hanging out drinking Pabst with Joe the Plumber or the homeless guy who lives between the dumpsters at their shipping warehouse.

      Free: The Authoritarians - all about those who follow strong leaders.

      by kbman on Fri Nov 09, 2012 at 09:43:05 AM PST

      [ Parent ]

  •  I have to wonder (0+ / 0-)

    if that "in union" typo for "in unison" is actually a typo or a freudian slip.  Or deliberate.

  •  Beer is a monolithic commodity (1+ / 0-)
    Recommended by:
    tardis10

    public services are not. Americans do not require the same public services at the same time. I received a public eduction, now I'm paying back into the system. I'm paying for other American's social security and Medicare, and in the future, someone will pay for mine.

    I could write for hours...

    "A cynical, mercenary, demagogic press will produce in time a people as base as itself." - Joseph Pulitzer

    by CFAmick on Fri Nov 09, 2012 at 09:06:34 AM PST

  •  It's a false premise, period. (1+ / 0-)
    Recommended by:
    tardis10

    Ask the sender to explain how he arrived at his figures. I've seen this before and asked the sender to do the same, but he never got back to me.

    Also, the tenth man pays more in taxes because he consumed more drinks (resources). A better one would be if the men agreed to work together, pool their money, buy the tools to make drinks for themselves, consume what they wanted, and perhaps sell the remainder for a profit. Of course, if lots of people did the same, the costs would drop across the board, and there'd be fewer 'tenth' men.

    The 'tenth man' is more than welcome to leave, but he never will. He always threatens to leave, just like his father did, and his grandfather, and his great grandfather. If he moved overseas, he'd be forced to 'endure' hardships like paying women equally, respecting their reproductive rights, living in a more diverse country with a firmly established national health care policy, a modern power grid, and a well funded education system that pays teachers well, all of which require that he pay more taxes than he pays in America.

    Kevin Fox can go to Mexico, Canada, or anywhere else on the planet. I suspect he'll continue to bitch and moan about how terrible things are in this country for the rest of his miserable, ungrateful life. But he's not going anywhere.

    The 'tenth man' will ALWAYS be back on his regular bar stool tomorrow. His biggest worry shouldn't be his tax bill. It's when the other men get tired of his bullshit and ask him to leave.

  •  Yes, if we cut taxes for all, the rich get most (0+ / 0-)

    But we are talking about needing to reduce the deficit.

    We have systematically been underpaying the bartender and we have to stop doing that.

    When Clinton wanted to increase taxes on the rich to pay down the deficit, the same arguments were made.  The rich will stop "creating wealth" and the economy will slow.

    Higher taxes passed and the economy boomed.  If you write a parable where you control how the actors behave, you can "prove" anything.

    In real life, higher taxes on the rich (Back to the Clinton Rates, not to the 50%+ that I think is fair) have been shown not to cause them to stop coming to the bar.

    Numbers are like people . . . Torture them enough and they'll tell you anything.

    by Actuary4Change on Fri Nov 09, 2012 at 09:16:10 AM PST

  •  Several problems with that analogy (0+ / 0-)

    First, the fact that 40, or 47% pay no TAXES is BULLSHIT!
    Yes they do.  The pay no FEDERAL INCOME taxes, but they do pay:

    (1) social security tax

    (2) medicare tax  

    (3) excise tax on items such as .... Beer?

    (4) state income tax

    (5) sales tax,

    (6) property taxes (if you rent, do you think that you're landlord doesn't pass them on to you?!).

    So those four out of ten do indeed pay for their "beer".

    Secondly, the fact that they would analogize things to beer, shows how callous they really are.  With federal expenditures, I hardly think that beer is quite the necessity as say:

    (1) national defense;
    (2) maintenance of our infrastructure;
    (3) subsidizing education;  
    (4) FEMA;
    (5) prisons;
    (6) research grants;
    (7) George Bush's prescription drug plan; and
    (8) interest on the national debt that was mostly run up by Reagan, Bush, and Bush

    Given the necessity of these items, don't you think it is fair to ask those with very little to pay as much as those with a lot?  If there is tax relief, should we throw it at those with the least.  Coming back to the beer analogy, if you gave those poor beer drinkers money, do you suppose that they might just buy more of what the rich beer drinker was selling.

    BTW, I know many poor people that are some of the hardest working people you ever met.  I know many rich people that are the laziest people you ever met.

    Finally, given the amount of deficits and national debt that we have, I think that bartender would go flat broke if he discounted the price of the beer.

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