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Uncle Bill
11-30-2010, 04:27 PM
This has been placed on RTF before, but with the ever demanding need for 'rote' training among more than the dogs, here's an illustration that one would think shouldn't need repitition. But for those that didn't grasp the 'point' the first time, read on...and good luck.

UB









Bar Stool Economics



Suppose that every day, ten men go out for beer and
the bill for all ten comes to $100 and 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." so 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!



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.




David R. Kamerschen, Ph.D.


Professor of Economics
University of Georgia




For those who understand, no explanation is needed.


For those who do not understand, no explanation is possible.










































[/font]

road kill
11-30-2010, 04:34 PM
Yeah, but...........

RK

menmon
12-01-2010, 12:41 PM
Problem with you beer analogy is that the people getting the free beer, can't afford to drink beer unless someone else is buying and since they are prohibited by financial circumstances from drinking beer, why should they contribute to the financially sound beer drinker drinking?

Kind of like the guy who never leaves his home town and only drives to work on one road, has his own water well, septic system and never gets on an airplane, grows his own food and makes his own clothes so he never needs anything the government provides except that one road to work. Should he pay as much as the guy that is in and out of every airport, drives daily on every interstate highway and shop refusely on the internet that is shipping him consumables daily and his company benefits from the various credits given by the government and yes he sends his kids to federal parks for summer vacation.

Do I need to go on about this or do you get it.

Uncle Bill
12-01-2010, 01:17 PM
Problem with you beer analogy is that the people getting the free beer, can't afford to drink beer unless someone else is buying and since they are prohibited by financial circumstances from drinking beer, why should they contribute to the financially sound beer drinker drinking?

Kind of like the guy who never leaves his home town and only drives to work on one road, has his own water well, septic system and never gets on an airplane, grows his own food and makes his own clothes so he never needs anything the government provides except that one road to work. Should he pay as much as the guy that is in and out of every airport, drives daily on every interstate highway and shop refusely on the internet that is shipping him consumables daily and his company benefits from the various credits given by the government and yes he sends his kids to federal parks for summer vacation.

Do I need to go on about this or do you get it.


I take it all back. You couldn't possibly be an "Oracle" of any type...IHOP or otherwise. You are a blithering knucklehead.

But then, the last line was explicitly meant for the likes of you.


For those who do not understand, no explanation is possible.



UB

paul young
12-01-2010, 02:00 PM
ahh yes; the poor little rich boy getting beat up by the unwashed masses.....

why, i imagine Warren Buffet cries himself to sleep every night. Bill Gates, too. and Lester Crown Jr. and ......ad infinitum.

they're all being taxed right out of existence.

and don't get me started on the poor, long suffering corporations.-Paul

menmon
12-01-2010, 02:36 PM
I take it all back. You couldn't possibly be an "Oracle" of any type...IHOP or otherwise. You are a blithering knucklehead.

But then, the last line was explicitly meant for the likes of you.


For those who do not understand, no explanation is possible.



UB

Maybe, but you want the poor to subsidize your existance. At least I'm ok paying my on way.

paul young
12-01-2010, 02:59 PM
Maybe, but you want the poor to subsidize your existance. At least I'm ok paying my on way.

no, he doesn't. Uncle Bill burns his social security check every month. he doesn't believe in it.
it is socialistic and he will have none of it.-Paul

Uncle Bill
12-01-2010, 05:27 PM
no, he doesn't. Uncle Bill burns his social security check every month. he doesn't believe in it.
it is socialistic and he will have none of it.-Paul




I would never expect you to comprehend...way over your head. Just the way the unions want you to be. They'll take care of you paul, so stop taking what happens to me so seriously.

UB




For those who do not understand, no explanation is possible.

Jason Glavich
12-02-2010, 08:26 AM
Problem with you beer analogy is that the people getting the free beer, can't afford to drink beer unless someone else is buying and since they are prohibited by financial circumstances from drinking beer, why should they contribute to the financially sound beer drinker drinking?

Kind of like the guy who never leaves his home town and only drives to work on one road, has his own water well, septic system and never gets on an airplane, grows his own food and makes his own clothes so he never needs anything the government provides except that one road to work. Should he pay as much as the guy that is in and out of every airport, drives daily on every interstate highway and shop refusely on the internet that is shipping him consumables daily and his company benefits from the various credits given by the government and yes he sends his kids to federal parks for summer vacation.

Do I need to go on about this or do you get it.

Ok so the beer drinker can't afford to drink beer? Everyone can afford to drink it, the question is can they BUY the beer. UB post showed they could only drink it if other people paid for it, sounds like a few programs we have around here.

As for your question about the "self made man" and the one depending on the government, I have a question. Does the guy who makes all his own stuff make his own fuel for his vehicle? A large percentage of roads are paid for by taxes on fuel, and other vehicle related taxes, not so much just the income tax. Also does he own the company he works for? You said his company benefits from credits given by the government, so what credits don't you like? That is really funny you don't like business credits but you are ok with paying your way as you said it. Most of us who pay our own way also pay for alot of other people to sit on welfare, etc...

Also if you are against credits do you write off anything at tax time?

Steve Hester
12-02-2010, 09:01 AM
For those who do not understand, no explanation is possible.[/quote]

Truer words were never said!!

Buzz
12-02-2010, 10:20 AM
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” -Warren Buffett

I keep asking my friends why the US should borrow more money from the Chinese so I can keep my Bush tax cut. First I get the blank stares. Then I hear the arguments about welfare queens and bloated government.


Bar stool economics is complete and utter idiocy and bears no relationship to reality. The thought that the rich are getting rolled, and we can just quite paying the lazy and welfare queens to stay at home and all will be well is laughable. Yup, it would be great if we could live in Utopia like some of the 3rd world countries I've traveled to. It's pretty cool driving down a highway past little shanty towns, shelters built out of palettes, mothers cooking on open fires, kids running around barefoot in sewage that flows across the ground. Quite a view from the mansions up on top of the hill. The hotels are great. Don't pay any attention to the walls surrounding the compound with razor wire on top and the armed guards wandering around to keep the criminals from rolling you.





In Class Warfare, Guess Which Class Is Winning

By BEN STEIN
Published: November 26, 2006

NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am.


Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

This conversation keeps coming back to mind because, in the last couple of weeks, I have been on one television panel after another, talking about how questionable it is that the country is enjoying what economists call full employment while we are still running a federal budget deficit of roughly $434 billion for fiscal 2006 (not counting off-budget items like Social Security) and economists forecast that it will grow to $567 billion in fiscal 2010.

When I mentioned on these panels that we should consider all options for closing this gap — including raising taxes, particularly for the wealthiest people — I was met with several arguments by people who call themselves conservatives and free marketers.

One argument was that the mere suggestion constituted class warfare. I think Mr. Buffett answered that one.

Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president.

In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clinton’s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bush’s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again.

By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.

The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War.

The imperatives for spending are built into the system, and now, with entitlements expanding rapidly, increased spending is locked in. Medicare, Social Security, interest on the debt — all are growing like mad, and how they will ever be stopped or slowed is beyond imagining. Gross interest on Treasury debt is approaching $350 billion a year. And none of this counts major deferred maintenance for the military.

The fourth argument in response to my suggestion was that “deficits don’t matter.”

There is something to this. One would think that big deficits would be highly inflationary, according to Keynesian economics. But we have modest inflation (except in New York City, where a martini at a good bar is now $22). On the other hand, we have all that interest to pay, soon roughly $7 billion a week, a lot of it to overseas owners of our debt. This, to me, seems to matter.

Besides, if it doesn’t matter, why bother to even discuss balancing the budget? Why have taxes at all? Why not just print money the way Weimar Germany did? Why not abolish taxes and add trillions to the deficit each year? Why don’t we all just drop acid, turn on, tune in and drop out of responsibility in the fiscal area? If deficits don’t matter, why not spend as much as we want, on anything we want?

The final argument is the one I really love. People ask how I can be a conservative and still want higher taxes. It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?

Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?

THIS brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or than I do.

Can we really say that we’re showing fiscal prudence? Are we doing our best? If not, why not? I don’t want class warfare from any direction, through the tax system or any other way.

luvmylabs23139
12-02-2010, 10:47 AM
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” -Warren Buffett

I keep asking my friends why the US should borrow more money from the Chinese so I can keep my Bush tax cut. First I get the blank stares. Then I hear the arguments about welfare queens and bloated government.


Bar stool economics is complete and utter idiocy and bears no relationship to reality. The thought that the rich are getting rolled, and we can just quite paying the lazy and welfare queens to stay at home and all will be well is laughable. Yup, it would be great if we could live in Utopia like some of the 3rd world countries I've traveled to. It's pretty cool driving down a highway past little shanty towns, shelters built out of palettes, mothers cooking on open fires, kids running around barefoot in sewage that flows across the ground. Quite a view from the mansions up on top of the hill. The hotels are great. Don't pay any attention to the walls surrounding the compound with razor wire on top and the armed guards wandering around to keep the criminals from rolling you.
Explain to me why we should as taxpayers pay someone else to sit on their ass. Why can't they do something, anything to contribute to society and earn that money. What is wrong with demanding they go pick up the trash in the parks, the side of the roads etc. Why can't they be required to work making the food for the criminals in the jails, cleaning the bathrooms in the courthouses, jails and other gov't buildings. They should have to earn the money they get. Make all welfare takers clean all gov't buildings mow the lawns, shovel snow off of public sidewalks etc.
Why do they get a free ride???
Anyone receiving any gov't benefits should have to do something fpr those benefits.
Want medicaid, then earn it.

road kill
12-02-2010, 10:52 AM
I find it interesting that many think that if we cut Unemployment payments people will find jobs.

If that is true, imagine if we tightened welfare!!



RK

luvmylabs23139
12-02-2010, 11:00 AM
I find it interesting that many think that if we cut Unemployment payments people will find jobs.

If that is true, imagine if we tightened welfare!!



RK
Welfare, we could simply require that these people do work within their area that is required to be done. As a result we could dump the overpaid gov't workers. Think about it. Make someone clean public buildings in return for welfare benefits and we could extend that to section 8 benefits. Then we would not have to pay some union idiot 10 times what the job is worth to do the same thing. Get rid of the union workers and make the welfare takers do it for their food housing etc.
It is a huge win for the actual taxpayers!:p:p:p:p