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Wed Nov 05, 2008 11:44 am

Someone sent me this at work.

"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!"
"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, 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."

Wed Nov 05, 2008 12:22 pm

Nobody likes taxes but when it comes time to figure out another way to pay for police, fire, ambulance, trash collection, schools, roads, sewers, the military, assistance to the elderly, etc. etc. no one has come up with a better way yet. Massachusetts voters rejected an effort yesterday to abolish their state income tax.

Wed Nov 05, 2008 1:27 pm

79SuperVert wrote: Nobody likes taxes but when it comes time to figure out another way to pay for police, fire, ambulance, trash collection, schools, roads, sewers, the military, assistance to the elderly, etc. etc. no one has come up with a better way yet. Massachusetts voters rejected an effort yesterday to abolish their state income tax.

You know,
I don't mind paying for police, fire, ambulance, trash collection, schools, roads, sewers, the military, assistance to the elderly, etc. etc.

I do mind paying for way too much ETC!

I drive by my township offices on a weekend and there are almost 2 dozen cars and SUV's parked there, this does NOT include police, fire, ambulance, public works, etc.
Who drives these? The township "big shots" who get paid with my taxes and fees so that they can go out and makes the average resident's life miserable whenever possible.
Why'd you cut down that tree? You made your driveway wider without a permit? You fixed your septic tank without permits or engineered drawings or approval from the Federal EPA the State EPA or the Local EPA!!
Don't get me wrong, not against planning and not against permits, it is just that we've gone so far into government regulation of virtually every aspect of life that government has grown to a size we can barely support!
Why? why do I need a permit to either cut down a tree or worse yet PLANT a tree?!? It's got to be an approved species of tree and put in the "proper" spot! Oh Please! This kind of nonsense has to be eliminated by someone at some point!
There is no common sense anywhere you look anymore. "We" Just built a new post office. It took almost 2 years, approvals, designs, road work, etc, etc, etc. Would you believe that on a busy road with people able to turn both left and right they only made the exit lane one car wide? So the bozo who has to go left (me) holds up 10 - 15 cars behind me who cannot go right or left until I get an opening and go! This is after our esteemed panel of government experts said "yes, this is a wonderful plan!" What did we really gain from this process except a traffic jam and the fact that I now go to the Post Office in next town over with a much more auto friendly parking lot? Those government workers got paid with my taxes for their expertise and we all got screwed.

Reduce government, reduce taxes.
To do this we the people have to expect less from government and take care of our own and ourselves.
Sadly, I'm old enough and smart enough to know that it will never change, especially in NJ !

Wed Nov 05, 2008 2:13 pm

djkeev wrote: To do this we the people have to expect less from government and take care of our own and ourselves.

Ding, ding, ding!!! There-in lies the problem. Too many folks expecting more and not wanting to do anything for it.

Wed Nov 05, 2008 4:22 pm

Let's not start posting email forwards.

Wed Nov 05, 2008 4:31 pm

Everyone complains about government, and it's true that there is a lot of waste and inefficiency there. But complaining doesn't solve it, nor does voting for someone who promises to control government spending. Think about it: you're electing a politician to go control other politicians??

The only way to do something about it is to get personally involved. You can go to your town's city council, zoning board, and school board meetings, watch what goes on, and then start to express your opinions and desires at the meetings. If you choose not to participate, it's just like if you choose not to vote. You're not entitled to complain about how things turn out.

Wed Nov 05, 2008 4:57 pm

I would like to respond to the questions about permits and zoning enforcement etc, particularly with regard to trees.

Trees are often planted in or overhanging public rights of way. They end up growing too large for their location, hitting overhead lines and requiring hacking and constant maintenence for the utility or the city. Some trees are simply inappropriate as street trees because of the way they grow. Many people are stupid, so it's best to ask them to pick from a list. The city arborists also know the correct spacing so the tree won't have to be dug up fifteen or twenty years down the road when it outgrows its spot.

Other code enforcement ensures that property is safe for current and future owners, that it is structurally safe, wired safely and plumbed correctly so as to prevent sewage water from getting into the public water supply. Zoning enforcement ensures that properties won't become a public nuisance, that dangerous animals won't run amok, etc.

If you go down there on a weekend or at lunchtime, of course there is going to be a sea of publicly owned vehicles there. Those people are out working in the field during normal working hours and they aren't allowed to take pool cars home.

I used to think that public schools wasted money. Now that I see the facilities and supplies that my own daughters have available to them, I don't see the waste. In Portland the schools are run on a shoestring budget. The voters won't pass building bonds and the buildings are in SAD shape. I'm sure this varies tremendously from community to community.

Wed Nov 05, 2008 5:50 pm

Major Woody wrote: Many people are stupid

I think you hit the nail on the head. There are a lot of stupid people out there and we need to have all these dumb laws and regulations because of them. Somebody needs to babysit the stupid people. Unfortunately the rest of us need to suffer.
Talking about the EPA....
I had an automotive shop owner tell he had the EPA at his shop and was looking at the drains in the floor. He told him that they needed to be filled in or covered. You are not allowed to use those drains when cleaning the floor. But you can just push all the crap out the door. :? The drains in out shop have been sealed up by the previous owner because he had to. Doesn't make any sense since all that crap is going to the same area! We've had complaints about having cars on a our lot that have no tags! They are customers cars that we are working on. We are an automotive repair shop. Some things just don't make sense. We've had complaints (violations) about having old cars in a fenced in lot behind the shop that you can't see into unless you stop and get out of your car and walk to the fence and peek through. Seems like a waste of taxpayers money to me!

Wed Nov 05, 2008 5:56 pm

Major Woody wrote: I would like to respond to the questions about permits and zoning enforcement etc, particularly with regard to trees.

Trees are often planted in or overhanging public rights of way. They end up growing too large for their location, hitting overhead lines and requiring hacking and constant maintenence for the utility or the city. Some trees are simply inappropriate as street trees because of the way they grow. Many people are stupid, so it's best to ask them to pick from a list. The city arborists also know the correct spacing so the tree won't have to be dug up fifteen or twenty years down the road when it outgrows its spot.

Other code enforcement ensures that property is safe for current and future owners, that it is structurally safe, wired safely and plumbed correctly so as to prevent sewage water from getting into the public water supply. Zoning enforcement ensures that properties won't become a public nuisance, that dangerous animals won't run amok, etc.

If you go down there on a weekend or at lunchtime, of course there is going to be a sea of publicly owned vehicles there. Those people are out working in the field during normal working hours and they aren't allowed to take pool cars home.

I used to think that public schools wasted money. Now that I see the facilities and supplies that my own daughters have available to them, I don't see the waste. In Portland the schools are run on a shoestring budget. The voters won't pass building bonds and the buildings are in SAD shape. I'm sure this varies tremendously from community to community.

Therein lies my gripe. A "sea of publicly owned vehicles" The sea of publicly owned and its payroll has become WAY TOO BIG.

I'll point out that I said that I understand the need for permits, allow me to add especially for buildings.

We are tying to homogenize life. Everyone the same, meeting some standard put in place by some snotty government workers caving into pressure from a few citizens. All houses will look the same, all grass must be completely green and cut the same.
You know, I like an old car in my yard to fix yet townships are outlawing having a car that isn't licensed or insured in your yard!
We no longer "own" our property. The local governments are simply kind enough to let us pay all the bills for a given parcel and allow us to live there while they legislate what I can or cannot do on my property and then charge me for their services. (yes, I understand and value zoning)

Admittedly these problems are much more amplified in urban situations than rural areas.

Wed Nov 05, 2008 6:16 pm

djkeev wrote:
You fixed your septic tank without permits or engineered drawings or approval from the Federal EPA the State EPA or the Local EPA!!

Although I agree with some of your statements, and this may just be my bias as an environmental engineer showing, but the septic tank repair is an issue of public health and welfare. IMO protecting the public is the government's most important function.

Wed Nov 05, 2008 9:08 pm

djkeev wrote: Reduce government, reduce taxes.
To do this we the people have to expect less from government and take care of our own and ourselves.
Sadly, I'm old enough and smart enough to know that it will never change, especially in NJ !

I'm not gonna beat a dead horse.

It ain't just NJ. It's everywhere. I also believe in user fees and tolls as opposed to funding from the general fund/budget. If you use it, you pay for it. That's a foreign concept on the left(ist) coast.

Thu Nov 06, 2008 5:49 am

localboy wrote:
I'm not gonna beat a dead horse.

It ain't just NJ. It's everywhere. I also believe in user fees and tolls as opposed to funding from the general fund/budget. If you use it, you pay for it. That's a foreign concept on the left(ist) coast.

If I understand you correctly, then if I use the fire dept. to save my burning house, then I should pay a fee for services rendered. This fee will fund the dept instead of their share of the county or city buget.

Is this what you are saying?

Thu Nov 06, 2008 5:52 am

rusty57 wrote: Someone sent me this at work.

"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!"
"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...

...this is where the story changes. The 10th guy gives his portion of the $20 back to the other 9 men to split among themselves and he leaves. The 9 guys continue to argue until the 9th gives up and so on until all 4 of the guys who did not pay in the first place get $5 each. They proceed to return to the bar and drink away their $5.

The next day, the 10th man goes to the bar early and buys a half share in the bar. He then tells the bar keeper "Don't tell anyone that I own half of the bar and you and I will both profit from the deal. Take the $20 discount you gave us last night at a rate of $2 per person (yes, the first 5 guys are paid to drink) but charge each person a cover charge and you and I will split the difference."

The next night each guy is asked to pay $10 to get into the bar but they pay the new price for their beer.

The first four men (the poorest) would pay $10 - $2 or $8.
The fifth would pay $11 - $2 or $9.
The sixth would pay $13 - $2 or $11.
The seventh would pay $17 - $2 or $15.
The eighth would pay $22 - $2 or $20.
The ninth would pay $28 - $2 or $26.
The 10th man, who now secretly owns the bar, pays $69 - $2 or $67 but he gets a $50 back from the cover charge and effectively pays $17 not counting the profits from the beer sales.

Thu Nov 06, 2008 6:33 am

Bar Fool Economics
Don't tax the rich on their INCOME or they might take their toys and leave.
Your intelligence is being insulted, but lower income people can understand a bar analogy.

Thu Nov 06, 2008 7:27 am

This is why I don't drink!

Thu Nov 06, 2008 8:30 am

In looking further into the situation, it turns out that the 10th guy was actually awarded a federal government contract that pays him to study why men drink. He incorporates himself, keeps all of the receipts and then deducts it off of his taxes as a business expense. In reality, the guys that are in the middle are getting hosed as they have to pay to drink, The government is paying for those poor bastards to drink. And the guy at the top (10th guy) is getting paid to drink. :lol:

Oh, I forgot to add that the reason that the bar owner reduced the costs for those guys to drink in the first place is because the liquor industry lobbied Congress for a bail out package to help support the bar owners that over-extended by purchasing big screen televisions for Monday night football.

Thu Nov 06, 2008 9:05 am

rarefinds wrote: In looking further into the situation, it turns out that the 10th guy was actually awarded a federal government contract that pays him to study why men drink. He incorporates himself, keeps all of the receipts and then deducts it off of his taxes as a business expense. In reality, the guys that are in the middle are getting hosed as they have to pay to drink, The government is paying for those poor bastards to drink. And the guy at the top (10th guy) is getting paid to drink. :lol:
Yeah, ask Warren Buffet about actual VS effective tax rates. He made 46M last year and his effective tax rate was 17.7% VS his secretary who's tax rate was 30%.

I read an article the other day stating that the top 1% hide (on the average) 21% of their income through tax loop holes. Almost a quarter of it right off the top, before it even gets taxed.

As a percentage of their income, they end up paying less than we do. Their costs of living taxes, i.e. sales tax and property taxes and such cost them a much smaller portion of their income, to which I say good for them for making it big, but the tax on what they earn should be at least in line with what everybody else is paying.

Thu Nov 06, 2008 9:29 am

Using this analogy we've spent the last 30 years practicing reaganomics and trickle-down economics, and that's where the rich get to piss on the rest of us after they're done enjoying their free drinks.

Thu Nov 06, 2008 9:33 am

And we look up to them, and idolize them, and want to be like them so that we can piss on others too! :P

Thu Nov 06, 2008 11:02 am

Rowroy wrote: localboy wrote:
I'm not gonna beat a dead horse.

It ain't just NJ. It's everywhere. I also believe in user fees and tolls as opposed to funding from the general fund/budget. If you use it, you pay for it. That's a foreign concept on the left(ist) coast.

If I understand you correctly, then if I use the fire dept. to save my burning house, then I should pay a fee for services rendered. This fee will fund the dept instead of their share of the county or city buget.

Is this what you are saying?

No. There are certain gov't responsibilities that we all, as a society, must share: police, fire, EMS, road maintenance etc. What I'm talking about in user fees are things like boat ramps, hiking trails, search & rescue etc. You use it, you pay. Tolls: large gov't construction projects, especially large road/bridge projects.

For instance: we need a new 520 bridge across Lake Washington. I don't live in Seattle and can count the number of times I've been across the old one on one hand. Why should my taxes be diverted there. I want it used where I live. TOLLS. The folks that use it pay for it. Of course that goes against the socialist beliefs of Seattle folks. :roll: