Pasadena Politics

Our Tax System Explained: 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 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 got’ ‘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, ladies and gentlemen, 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.

There was this article I spotted yesterday which, compared to thisother article from today makes me go: hmmm. 

A lot of people seem enamoured with Obama.   Honestly, I am not certain why.  Sure, he is good looking, but the content of his character?  Looking at what he proposes, who his influences are, I can only say that he is unattractive.   He believes that Government is the solution to societal problems.   After all, he left community building because he thought it was not as effective when compared to politics:

“In truth, however, if you examine carefully how Obama conducted himself as an organizer and how he has conducted himself as a politician, if you consider what he said about organizing to his fellow organizers, and if you look at the reasons he gave friends and colleagues for abandoning organizing, then a very different picture emerges: that of a disillusioned activist who fashioned his political identity not as an extension of community organizing but as a wholesale rejection of it. Indeed, the most important thing to know about Barack Obama’s time as a community organizer in Chicago may not be what he gained from the experience–but rather why, in late 1987, he decided to quit.” [source]

Take, for example, the $250,000 floor on higher taxation he is proposing.    “Joe the plumber” – yes, that is his name as it is derived from his middle name (I too have gone by my middle name: James), put an appropriate spotlight on this matter: what does this mean for the average American looking to rise above their current financial state.   Is that $250,000 net or gross?   A staffer mentioned it was net, but Obama, similar to Clinton a decade before him, could easily claim it was not something he said and thus promised.  Given the proclivity for the current Congress to want to spend more and more, grant voting rights to people who are breaking the immigration laws of this nation, and desire to impose government on all aspects of the Citizenry’s lives (except when it may interfere with their ability to raise money from big donors) do we really want a member from the same party keen on More, Bigger, and, may I laugh, Better Government in the executive seat?  

 Let alone the two or more Supreme Court Vacancies which will be coming up?

The citizens of America are poised on the brink of a cliff.   On one hand is a steep climb up towards liberating ourselves from Government and on the other is the steep drop into the grinding maw of Government.   The tough part is convincing fellow Americans that the tougher road of self-reliance apart from Government giving you a hand at every turn is better than letting the Government control your life in exchange for being coddled by it.   The real disapointment is that McCain only offers to keep us on that brink, yet it is still better to lie there than roll off.  RINO. 

Well… you know how it goes.

 Imagine the next “blame man for the demise of the X so we’ve got to stop doing Y” hysteria this will trigger but the people yelling for action will be sure to neglect mentioning the external factors really causing X. 

 I am prompted to point this out in hyperbole since people like Gore neglect to mention that the sun is hotter and, as an odd coincidence of the fact we obtain the majority of heat from it, causing the Earth and other planets to warm up.    From this link, my favorite quote: “Abdussamatov’s work, however, has not been well received by other climate scientists.”   So they criticise him because his theory, based on correlating observations, does not match: “Theory or observation.”  Huh… really?  Sounds like competing theories at work and attempts to dismiss theories that contradict your own.  Perfectly normal, especially if consideration of non-human induced Global Warming or simply suggesting there is none will cause you to lose grant money. 

Fun list on warming.