Joie is sentiment exaltant ressenti par toute la conscience, that is, involves one’s whole being . They need to learn the basics of taxation. The nine who are congregated should lease avoid beating the 10th men! Jean Baptiste Colbert who was the French Economist and Minister of Finance under King Louis XIV of France. 1619-1683 is quoted to say that : “The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.” These ‘filthy’ rich are important for the society? Squeeze the “rich” too much and the required income may not be forthcoming.
‘BAR ROOM ECONOMICS is a story that does an excellent job of illustrating how our tax system works. Hope you enjoy it: 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 everyone’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.
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 pound out of the £20,’ declared the sixth man. He pointed to the tenth man, ‘but he got £10!’
‘Yes, that’s right,’ exclaimed the fifth man. ‘I only saved a pound, too. It’s unfair that 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 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.’
David R. Kamerschen, Ph.D. Professor of Economics
The moral of the tale, as circulated on the internet, is that while the people who pay the highest taxes get the most benefit from a tax reduction, if you tax them too much and attack them for being wealthy they just may not show up anymore. They might even head abroad. Politically it is unworkable not to condemn the wealthy for more tax. Even bar-room economics as outlined above will not convince the lower paid and public servants that while they are being punished for the economic slowdown the rich are being allowed dodge the bullets (when, in fact, they don’t).
But it means the Governments will have to take great care to get the balance right. Squeeze the “rich” too much and the required income may not be forthcoming. Those Canaan Days, “Now the fields are dead and bare, No joie de vivre anywhere”
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.