for those people who love to hate on the wealthy...

[Octavia156]

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 ball.

"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 realised 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.

 

[savagewind]

So you agree with me....people are getting stupider?

 

[McBell]

I never did like the fact that when people present these type analysis they never include all the tax breaks, exemptions, loop holes, and other conditional modifiers.

 

[MysticSang'ha]

I think your argument against "hating on the wealthy" makes sense if we assume two things:

1) That the cost of goods does, in fact, goes down just like the bar owner offers.
2) The poor are able to have the same and equal access to the same resources as the rich throughout all price structures.

Of course people will compare and contrast and decide what is fair and what isn't based on what they feel entitled to.

 

[apophenia]

Well, that was a complicated attempt at camouflaging the real issue.

The wealthiest individuals earn millions of dollars per year while the vast majority earn tens of thousands (the median income is about $50K).

No matter how clever a fable you invent, you can't adequately explain why one person's annual work is worth $50K and another's work is worth $5 million. ( You can invent more BS which purports to explain it ...)

For every hour that they work before they go to the pub for a beer, man 10 earns $2000 while man 7 earns (say) $30.

That was not nearly so complicated as your convoluted fable was it ?

But then it doesn't need to be , because it isn't BS propaganda designed to whitewash fundamental inequity.

The claim that 'man 10' , the $5 million man, is the 'brains of the outfit' without whom we would all be incapable of producing anything is a steaming pile of elephant ****.

 

[apophenia]

If people were paid according to how much their ideas contributed to wealth production, scientists would be the wealthiest people of all.

Are they ?

Of course not.

Apparently schemers and scammers who know how to stitch up deals are worth 20 times the median income.

And it is their explanation of economics which the OP represents.

 

[Octavia156]

Well, that was a complicated attempt at camouflaging the real issue.

The wealthiest individuals earn millions of dollars per year while the vast majority earn tens of thousands (the median income is about $50K).

No matter how clever a fable you invent, you can't adequately explain why one person's annual work is worth $50K and another's work is worth $5 million. ( You can invent more BS which purports to explain it ...)

For every hour that they work before they go to the pub for a beer, man 10 earns $2000 while man 7 earns (say) $30.

That was not nearly so complicated as your convoluted fable was it ?

But then it doesn't need to be , because it isn't BS propaganda designed to whitewash fundamental inequity.

The claim that 'man 10' , the $5 million man, is the 'brains of the outfit' without whom we would all be incapable of producing anything is a steaming pile of elephant ****.

erm yes you can.

a doctor spends 7 years in higher education, has to have worked hard or be very clever to get the required grades.
His work IS worth more $$$ than someone who sweeps the streets. anyone can sweep the street, very few can perform opn heart surgery - this adequately explains why some peoples work is worth more than others.

and its not my fable, is an analogy presented by a professor of economics.

 

[sandandfoam]

One problem I have is that we pay the tax we have to and the rich pay the tax they want to.

Another is that in this country a lot of tax is used to subsidise the rich. That really ticks me off.

 

[Wirey]

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 ball.

"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 realised 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.

Since the tenth man didn't show up for drinks, he 'unfriended' men 1 through 9, who stopped shopping at his store, driving him into bankruptcy.

If you want to do business in a rich, well-off western democracy, taxation is the cost of business. If that's a problem, go peddle your wares in Kenya and see how things work out for you. Wanna piggy back on my society's success? There's no free ride.

 

[Kilgore Trout]

That a professor of economics could construct such an inapplicable analogy, helps to show how ridiculous the field is. If I ever saw an economist produce a model, or formulate a conclusion, that wasn't primarily based on a biased agenda, I think I'd faint.

 

[Alceste]

What a silly story.

 

[freethinker44]

erm yes you can.

a doctor spends 7 years in higher education, has to have worked hard or be very clever to get the required grades.
His work IS worth more $$$ than someone who sweeps the streets. anyone can sweep the street, very few can perform opn heart surgery - this adequately explains why some peoples work is worth more than others.

and its not my fable, is an analogy presented by a professor of economics.

I can agree to this. The problem isn't that doctors make a few hundred thousand a year, the problem is that businessmen make tens of millions of dollars a year, and some make tens of billions a year. If the system was based on education they would make much less than a doctor. In fact very few people would be millionaires.

 

[YmirGF]

That a professor of economics could construct such an inapplicable analogy, helps to show how ridiculous the field is. If I ever saw an economist produce a model, or formulate a conclusion, that wasn't primarily based on a biased agenda, I think I'd faint.

Which reminds me of the story of sitting 3 economists down in a room for a chit-chat, then locking the door. After a length of time, they are let out and asked what they had agreed on. The only thing they were unanimous about was that the other two were crazy.

 

[Revoltingest]

Which reminds me of the story of sitting 3 economists down in a room for a chit-chat, then locking the door. After a length of time, they are let out and asked what they had agreed on. The only thing they were unanimous about was that the other two were crazy.

You got dat right. Economics is nothing but phrenology gussied up with math.
(I still see value in it....but only when it agrees with me.)

Anyway, my investment reversals appear to be improving, so I hope that in
the next couple years I'll be loathed for my wealth.

 

[dust1n]

Welp, trying to cram reality into that tiny little picture is about as difficult as getting through my computer through the toilet.

 

[apophenia]

erm yes you can.

a doctor spends 7 years in higher education, has to have worked hard or be very clever to get the required grades.
His work IS worth more $$$ than someone who sweeps the streets. anyone can sweep the street, very few can perform opn heart surgery - this adequately explains why some peoples work is worth more than others.

and its not my fable, is an analogy presented by a professor of economics.

Uh huh. How many of the ultra-wealthy are doctors ?

And even if they were more than just investors, you still have nothing but a philosophical argument about relative value. I don't want to live in a world with filthy streets. We would soon need a lot more doctors ...

Those who do more complex and 'valuable' work are already rewarded by their own activity. Would you rather be doing something mundane and repetitive, or something fascinating and complex ?

If I gave you the option of sitting at home all day doing nothing, or developing a complex skill appreciated by others, both rewarded with adequate food and shelter, which would you choose ?

You don't need to be a genius to know that the latter choices are in themselves more rewarding.

So you are saying that those with intrinsically more satisfying work deserve more money as well.

Why ?

Is the doctor such an *** hole that he wouldn't help a sick person unless he was made richer than them ? Nice (not).

and its not my fable, is an analogy presented by a professor of economics.

Big deal. How many of these professors accurately predicted the GFC ?

Most of them ?

Half of them ?

One tenth of them ?

Less ?

Also, it would not be too hard to generate a list of CEOs who oversaw companies which made a loss, yet still received huge bonuses.

Your logic is not logic. It is propaganda.

 

[LuisDantas]

For the tale to be useful, some assumptions would have to be accepted.

1) That there is such a thing as an inherent right to wealth.

2) That such a right is largely unrelated (or independent, if you prefer) to that of others.

3) That decent living conditions are not a concern for the parties involved.

4) That wealth is a result of personal merit to a significant extent, and only to a lesser extent a matter of favorable circunstances.

I don't think any of those four warrants much credit, personally.

 

[Alceste]

For the tale to be useful, some assumptions would have to be accepted.

1) That there is such a thing as an inherent right to wealth.

2) That such a right is largely unrelated (or independent, if you prefer) to that of others.

3) That decent living conditions are not a concern for the parties involved.

4) That wealth is a result of personal merit to a significant extent, and only to a lesser extent a matter of favorable circunstances.

I don't think any of those four warrants much credit, personally.

You also have to assume a rich dude would be out drinking with a bunch of poor dudes.

 

[Falvlun]

You could also claim that the only reason why the rich dude had to pay for it all was because through various legal means, he has stolen everyone else's money.

 

[Sunstone]

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

Spoken like a fanatic. Fanatics, by the way, don't make good economists, so far as I know.