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The Tax System Explained.


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You can read what I guess is the original source and all the comments here

 

http://blogs.telegraph.co.uk/finance/ianmcowie/100008153/government-spending-review-tax-and-spend-explained-in-beer/

 

Haha well done Cynic. Plagiarism goes down about as well as Thatcherist right wing ideas about the tax system with me.

 

Though we couldn't have had a full explanation of the tax system without the exposure of some fraud I guess.

 

You could at least have written one sentence that was actually your own pininsho... If you don't understand why...no explanation is possible. :hihi:

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Haha well done Cynic. Plagiarism goes down about as well as Thatcherist right wing ideas about the tax system with me.

 

Though we couldn't have had a full explanation of the tax system without the exposure of some fraud I guess.

 

You could at least have written one sentence that was actually your own pininsho... If you don't understand why...no explanation is possible. :hihi:

 

It's amazing some people jump to all sorts of conclusions that have no relevance to the topic of the thread in question.

 

You seem to be under some misapprehension that I'm somehow trying to claim writing the article in the OP when I never actually made a comment in the OP about what the source of that information was for the simple reason that I received the info via email (the sender also not providing a scource but, unlike some, I didn't assume that the sender of the article was the author so why should anybody think I was the author and why should that matter anyway). The source of the article is irrelevent for if the mathematics work then they work irrespective of where the information's come from.

 

I simply thought that the article explained the basic tax system quite well and so thought it would make interesting reading for people to discuss so I quickly copied and pasted the email, clicked the "Start Topic" button and then got on with the work I should be doing at the taxpayer's expense.

 

So if you wish to read into my motives something that isn't there then feel free and also feel free to comment on the actual article if you've got the intelligence rather than standing on the sidelines sniping while adding nothing to the discussion.:roll:

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It's amazing some people jump to all sorts of conclusions that have no relevance to the topic of the thread in question.

 

You seem to be under some misapprehension that I'm somehow trying to claim writing the article in the OP when I never actually made a comment in the OP about what the source of that information was for the simple reason that I received the info via email (the sender also not providing a scource but, unlike some, I didn't assume that the sender of the article was the author so why should anybody think I was the author and why should that matter anyway). The source of the article is irrelevent for if the mathematics work then they work irrespective of where the information's come from.

 

I simply thought that the article explained the basic tax system quite well and so thought it would make interesting reading for people to discuss so I quickly copied and pasted the email, clicked the "Start Topic" button and then got on with the work I should be doing at the taxpayer's expense.

 

So if you wish to read into my motives something that isn't there then feel free and also feel free to comment on the actual article if you've got the intelligence rather than standing on the sidelines sniping while adding nothing to the discussion.:roll:

 

A little hypocritical of you to accuse me of adding nothing to your thread when all you did was copy and paste someone else's thoughts in your OP don't you think? :loopy:

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Although I do like this comment on the comments page on the Telegraph link so thanks for providing that cynic.:thumbsup:

 

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for,that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

 

It rings so true.:cool:

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A little hypocritical of you to accuse me of adding nothing to your thread when all you did was copy and paste someone else's thoughts in your OP don't you think? :loopy:

 

No because the information in the thread said it all for me. No editorialising was necessary.

 

But if somebody else wishes to comment on the article then I'd be interested to read their comments.

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You can read what I guess is the original source and all the comments here

 

http://blogs.telegraph.co.uk/finance/ianmcowie/100008153/government-spending-review-tax-and-spend-explained-in-beer/

 

I think the comments great and expose just why the analogy so poor.

 

It doesn't even work on a rudimentary level. If you are talking about tax, in this fashion it should also include a discussion of worth and what income distributions between poorest and richest is healthiest for a country... an answer to which is a low distribution countries like Japan and Nordic countries are far more productive and better places to live than ones with unequal income distributions. See the "Spirit level" as one example of research pointing out this relationship.

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No because the information in the thread said it all for me. No editorialising was necessary.

 

But if somebody else wishes to comment on the article then I'd be interested to read their comments.

 

Perhaps the actual author of the piece would feel differently...

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I am fairly sure I have seen it on the forum before too.

 

It's been done a few times Wildcat, makes you wonder?

 

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.

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 paid £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 ten 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.

 

and again.

 

 

 

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 their 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 one 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, Imperial College, London

 

For those who understand, no explanation is needed.

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

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