# Ten men go out for beer



## Bubblehead (Mar 5, 2007)

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 changed tack.

"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 men would 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 a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid £2 instead of £3 (33% saving).

The seventh now paid £5 instead of £7 (28% saving).

The eighth now paid £9 instead of £12 (25% saving).

The ninth now paid £14 instead of £18 (22% saving).

The tenth now paid £49 instead of £59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a pound out of the £20 saving," 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 pound too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get £10 back, when I got only £2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax 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 their 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 government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally 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.

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


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## GEMMY (Jun 19, 2006)

A lot of people on here won't get the parable. :wink: 

tony


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## teemyob (Nov 22, 2005)

*get*



GEMMY said:


> A lot of people on here won't get the parable. :wink:
> 
> tony


What is a Parable?

TM :lol:


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## GEMMY (Jun 19, 2006)

You're not religious are you :?: :lol: 

tony


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## Jented (Jan 12, 2010)

Hi. 
Is it an EU. Parabolic Curve? 
Ted.


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## Pudsey_Bear (Sep 25, 2008)

*Re: get*



teemyob said:


> GEMMY said:
> 
> 
> > A lot of people on here won't get the parable. :wink:
> ...


Is it a cross between a perambulator and an umbrella :?: :?:

Yeah I know it doesn't work, but it's all I could come up with.


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## ChrisandJohn (Feb 3, 2008)

Perhaps analogy is a more secular sounding term?

Chris


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## GEMMY (Jun 19, 2006)

I think I've morphed on to the pendants forum :roll: It's a gentler term)

tony


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## geraldandannie (Jun 4, 2006)

GEMMY said:


> I think I've morphed on to the pendants forum :roll:


I didn't know you were a medallion man, Tony :wink:

Gerald


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## GEMMY (Jun 19, 2006)

Gerald to understand what I mean you'll have to ask Frank :wink: 

tony


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## Penquin (Oct 15, 2007)

ChrisandJohn said:


> Perhaps *an alogy *is a more secular sounding term?
> 
> Chris


I almost hate to ask but...... 

what is an alogy? :?

Is it where you come up in spots and sneeze everywhere? :roll:

My Mum used to remind to be a lert when out on my bike, but I was never sure exactly what lerts do on the road? 

While you are working that out could you explain why a booklet is a small book, and a leaflet is a small leaf, so what is a pamph (please)? :lol:

Dave

(with profuse apologies for taking this {offtopic} )


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## GEMMY (Jun 19, 2006)

Yes P off you're making light of the OP.  

tony


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## The-Cookies (Nov 28, 2010)

but the bar owner reduced the beer to £80 and after their reductions the amount they had where going to pay was £79 :?: seems right for the tax system, wrong figures


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## sallytrafic (Jan 17, 2006)

Price of Beer coming down?

Some economist this David R. Kamerschen, Ph.D.


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