You know that email sent out, that's always misattributed to an economist from the U of Georgia? I always see some smug poster on youtube or some message board using that or mailing it out. It's one of those oversimplified things that makes a heavily twisted point. Well I found an awesome reply to it. Hilarious work. -WB
Here it is the original (the reply is in the comments but I'll paste another link):
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.
http://hypocrisy.com/2008/10/26/tax-policy-explained-by-david-r-kamerschen-phd/Here is the reply:
Response To How Tax Policy Works, Misattributed to David R. Kamerschen, Ph.D.
October 30th, 2008 • Guest
Hypocrisy indeed. I prefer this explanation: (To How Tax Policy Works)
In the US and throughout most of the rest of the world, the tenth man would have paid off a politician for $10 to get a beer subsidy of $30 per night(to create jobs for the bartender). Of this $30, $10 of course would have covered the lobbying expense, $10 would go in his own pocket, $1 would go to the bartender to keep his mouth shut, and $9 would go to the bar.
The Bar would give him a kickback of $10 each night for bringing in his 9 buddies to make them into alcoholics, repeat customers for life.
The Bar would then raise their prices to $130 citing inflation and higher taxes.
The tenth richest man would then secure his finances in a Dutch Holding Company managed by a trust in Ireland which invests in Chase and Bank of America. He would then explain to his buddies that he is as poor as the rest of them and can’t afford to pay himself as he cries into his beer that night citing his latest financial report which shows him to be broke on paper so that he doesn’t have to pay taxes in the United States ever again.
Citing his former generosity, the other nine men would agree that the tenth man can now pay nothing like the 4 poorest.
The others would then be faced with an adjusted amount of
* The fifth would pay $3.
* The sixth would pay $10.
* The seventh would pay $22.
* The eighth would pay $38.
* The ninth would pay $57.
Now the group would recognize that this is not fair and so would lobby the Government for an Earned Drinking Credit for the Poorest men. The government would oblige and give the four poorest men $2 each, but they would tax the 5th - 9th men $2 each as well.
* 4 men receive a total of $8 and 5 men pay $10.
The adjusted amounts would then look like this for all 10
http://hypocrisy.com/2008/10/30/response-to-how-tax-policy-works-misattributed-to-david-r-kamerschen-phd/