tax breaks and such

[jrobie79]

took this from an email, i left the formatting the same, might be a little difficult but i thought it was good nonetheless


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 on 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.
>
>David R. Kamerschen, Ph.D.
>Professor of Economics
>University of Georgia
>
>For those who understand, no explanation is needed. For those who do
>not understand, no explanation is possible