The Politics Of Drinking Beer
Sometimes A Beer Makes Everything Appear Entirely Clear!
Once a week, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way that we progressively 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.
And the tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the bar owner caused them a little problem.
“Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly bill by 20%. Now you only pay $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?
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 not only would the first four men still be drinking for free - but the fifth and sixth man would land a windfall and be paid to drink beer!
So, the bar owner suggested that it would be fairer to adjust how much each paid in accordance with the same progressive principles as before. He proposed the following:
The fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid $2 instead of $3 (a 33% saving).
The seventh man now paid $5 instead of $7 (a 28% saving).
The eighth man now paid $9 instead of $12 (a 25% saving).
The ninth man now paid $14 instead of $18 (a 22% saving).
And the tenth man now paid $49 instead of $59 (a 16% saving).
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings.
“I only received $1 out of the $20 saving," declared the sixth man.
He pointed to the tenth man, "He saved $10!"
"Yeah, that's right," exclaimed the fifth man. "I also only saved a $1.”
It's unfair that he received ten times more benefit than me!"
That's true!" shouted the seventh man. "Why should he receive a $10 benefit, when I only get $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't receive any benefit at all. This new tax system exploits the poor!"
The nine men surrounded the tenth man and attacked him.
The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him.
But when it came time to pay the bill, they discovered something important - they didn't have enough money collectively to pay for even half of the bill!
For those who understand, no explanation is needed.
For those who don’t understand, no explanation is possible.