Barstool Economics

(I saw this on my friend's private blog and copied it! Enjoy!)

Suppose that everyday, 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 (and richest) would pay $59.

So that's what they decided to do.

The ten men drank in the bar everyday and seemed quite happy with the arrangement. Until one day, the bar 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 for the bill the way we pay our taxes, so the first four men were unaffected. they would still drink for free. But about the other six men--the paying customers? How could they divide the 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 man now paid $2, instead of $3. (33% savings)
The seventh man now paid $5, instead of $7. (28% savings)
The eighth man now paid $9, instead of $12. (25% savings)
The ninth man now paid $14, instead of $18. (22% savings)
The tenth man now paid $49, instead of $59. (16% savings)

Each of the six was better off than before and the first four continued to get 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 he got ten times more than I did!"

"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. 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 between all of them for even half of the bill.

I loved this! It really opened my eyes! Steve and I have lived the poor life of students ever since we were married. Only one year in 11 have we ever had to pay taxes. It made me evaluate my attitude. Do I feel "entitled" to get all the resources available in this country (public education, libraries, parks) for free, just like the four poorest men with their free beers? How would I feel as the richest man? Would I be willing to part with an enormous percentage of my hard-earned money so that all the others could get those same benefits for free? Even if those free-loaders despised me, blamed me, and attacked me on a regular basis?

I thought it was a very interesting commentary on our tax system and the attitudes of those who either pay to keep it going or are the beneficiaries thereof.