This is an absolutely superb 60 minute talk on
the economics of the wage gap by Robert
Reich. Don't miss
THIS. (Thanks to Becky Spoon
for the link)
Try your hand at
this mathematical voting system
HERE
Tax Economics at the Bar -
Anon
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,
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.
Yeah, but the
rich are already sending their cash to offshore tax havens
and investing overseas. The truth is that the U.S. economy
is in deep trouble and the low- and middle-wage earners
can't pull it out. The rich have every reason to want to
save the country and they can better afford it.
