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# Bar Stool Economics & How Taxes Work

 by Jim Wang Email   Print

Here’s a little story my friend Matt sent me and it’s about economics, taxes, and drinking; only one of which I actually enjoy. I didn’t double check the math but it appears sound and the message is pretty interesting (especially given the talk of the 2008 tax stimulus package!). I invite you to share your thoughts in the comments.

(The origins of this story, as well as some of the story details, are unclear but it’s still an entertaining and thought provoking read)

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. What happens to 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.

### 42 Responses to “Bar Stool Economics & How Taxes Work”

1. Lily says:

That story is illustrative, but only to a degree. Like the Laffer curve, the story makes the sensible point that if you overtax the rich, tax revenue will go down and everyone suffers. But also like the Laffer curve, the story doesn’t indicate how much is too much. I pity the legislators who have to guess at the right tax rates. They can’t make everyone (or sometimes anyone) happy.

You pity the legislatures that have to “guess at the right taxes”. Firstly, they shouldn’t even be taxing our incomes! It is unconstitutional and the power to tax income is only allowed by the STATES, not the Fed. So, don’t feel pity for a bunch of soft, lazy politicians who don’t even show up to vote in Congress unless a bill will get him media coverage. Secondly, they don’t have to “guess” The tax rates are designed to be the absolute highest without RIOTS. But, you can thank Obama and the Democrats for any riots that do occur once the richest most productive Americans have their taxes go to a socialistic 51%.
Let us remember, Senators are paid 168,000 a year for a 3 or 4 day work week, mostly consisting of golfing or cocktail parties. They have no authority to TAKE our money that WE EARN from time away from family to produce NEW products, inventions, and services. Considering this, isn’t it laughable that there is even a debate for US paying for universal coverage or corrupt energy bills when the FED shouldnt even have our money to play with?
Also, I am a recent grad with a BA in political science going for my doctorate and am involved in my states politics. A disclaimer for any upidy Liberals who try to trash Conservatives as dim witted country folks (Libs are just jeolous because country folk have almost no carbon footprint compared to them living in NY and LA, massive spewing polluting cities. “Earth shopping bags” or driving a Prius might make you feel better, but you actually just look like a hypocritical fool.

• Anonymous says:

wow, you should go live in say, North Africa, or any number of other countries out there. Gain a little perspective on just how good you have it. And just how great our admittedly flawed government is.

• Joe says:

Dude– ever hear of the 16th Amendment? I’m with you that Congress are a bunch of out-of-touch good-for-nothings, but they have every right to levy an income tax. It’s one of our basic laws.

Joe

• Ezsilver says:

I’d vote for you!

2. rocketc says:

I want tax cuts for the rich so that they will be able to buy more, invest more and hire more employees.

We are slowly killing the golden goose in our country.

3. Minimum Wage says:

The tax story makes the erroneous implication that those guys actually get something from government.

Question: why should someone earning menial wages in the private sector (e.g. a minimum wage janitor) pay high taxes to support a government worker doing the same thing (e.g. \$50K government janitor) for an inflated wage?

4. Minimum Wage says:

Don’t forget all those tax breaks which make it possible for millions of families making \$50K-\$100K to pay a lower effective tax rate than someone toiling at a menial job for \$20K with no tax breaks.

Got employer-provided health insurance and other fringe benefits? Got a homestead exemption? Got deductions for property taxes (which are lower to begin with thanks to your homestead exemption) and mortgage interest? Got a cool \$500K capital gain tax free when you sold your home?

Is this a great country or what?

5. cptcaswell says:

Please don’t forget tax breaks are a reduction in expenses paid to the government usually as an incentive take a risk with hard earned money saved that your average joe would have blown on beer,cigarettes and lotto tickets. To speak negatively about one for qualifying for a tax break is just wrong.

6. MFJ says:

Or how about we stop government from spending so much money. If our spending was at the same level as it was 10 years ago no one would need to pay income taxes.

7. Average American says:

The story leads out a few details that would truely equate it to reall life. First, the amount for sales tax and the tip would be paid by everyone, even the men who “didn’t pay anything.” (This would be equal to state sales tax that basically everyone pays, and the tip would be equal to Social Securtiy and Medicare Taxes paid begining with the first dollar earned. The only difference would be that the rich men would only pay a tip equal to a certain threshold… just as they do with Social Security Taxes, and this amount would be lowered by a deduction they would take for being self-employed. (Assuming they are self-employed.) Also if we really want to be realistic the first portion of the beers were paid for by everyone because the wealthier gus didn’t start paying until they reached the first tax bracket, but everyone paid with their social security and medicare taxes. Secondly, it forgets that the amount they paid for the beers would be reimbursed to them as a business expense from their own LLC, which then writes the amount of this reimbursement as a tax deduction. The same scenerio takes place for the cost of their auto expenses getting there, and probably several other things as well. Oh, and I forgot to mention that their LLC that paid for the beers was actually paying for it with a combination of the rent the men with them were paying for their one bedroom, low income housing apartment owned by the LLC, and the tax breaks and other incentives the government gave the wealthier men for being so kind as to rent the low income housing apartments. So in the end the drinks are actually nearly entirely paid for by the poorest men.

• Anonymous says:

So your saying we should punish the wealthy people in America whop more often than not had the determination to work out of poverty. They are the ones who keep our economy, however shaky it is, running by funding industry. Yes they do recieve income from the purchases made by the avaerage American but that is the definition of a buisness.

• ChuckyB says:

Are the LLC owners you reference the same guys who provide jobs to people since they actually run businesses? Are these also the same guys who invest their time and put their own capital at risk rather than simply “getting a job”? Are these the same guys who have to pay massive healthcare expenses for the people they hire (and are about to pay a bunch more)? Why don’t you run those expenses through your fatally flawed analysis. As far as sales tax, you pay when you consume. Can’t get any more fair than that.

8. MK says:

Oh, that is *fantastic*!

9. Um, not quite does it work that way. This woman in CA makes \$90k/year but she pay 5.7% in federal taxes. She’s a CPA and explains it beautifully. http://monkeymama.savingadvice.com/2008/02/05/mortgages-taxes-gas_35183/

So how does the richer on the people pay more? I think this is true for quite a lot of people.

10. rhbee says:

This story only works if you believe that someone who is already getting an incredible price break on their beer would be sober enough to complain about the supposed break the wealthiest was getting. I say supposed because I believe mr. averageamerican’s analysis is by far the most accurate. Besides that, we know all those rich people have bodyguards to prevent anyone from getting too upset when someone notices how much they are getting away with.

• palooza says:

You forget an entitlement mentality that only motivates the destitute to see how much others have, and because they have never worked for their living and always had it handed to them (granted, after much bureaucratic hoop jumping) . They complain that they do not have it themselves and really have no idea that it requires work to earn it. Admittedly, I have little patience when I see someone paying for all their food with vouchers and welfare cards, talking on a much better phone than I have, because I actually have to pay for everything I have. Nobody is giving me my food for free. The system encourages laziness–why bother working when you get more for doing nothing?

I must disagree that all the “rich people” have body guards to protect them, rhbee. Was that tongue in cheek? Because the top 5% make, what, over 100K? That’s really middle class wages in places like DC, NY, LA. The only people really “getting away” with anything is our congress, which makes questionable laws to protect the most corrupt and powerful corporations. When they all get caught with their hands in the cookie jar, congress holds pointless hearings and investigates the corruption which they themselves enabled.

11. Minimum Wage says:

I don’t spend money on beer, cigarettes, or lotto tickets, so I figure I’m sober ande have a right to complain.

Wow, great post. I completely agree with this with one exception. We don’t want to abuse the wealthy with ridiculous taxation, but they need to see how much benefit they got from being here in the first place. It is very unlikely for guy #10 to have been able to become as wealthy as he has if he was born in any other country other than the US (OK maybe W. Europe but their taxes are even higher than ours).

On a similar note, how much would any of you be willing to pay at birth to have been born in the good ole USofA? I know I would certainly pay a lot and so would many other people. Now, flip that around a little, if you manage to become wealthy during your lifetime how much would you be willing to pay to have been born in the USA (meaning someone would go back in time and make you be born in a random other country if you don’t pay up). I’d pay almost everything to ensure I (and my children, and so on) to ensure the freedom and opportunities that being here gave me.

Now that everyone is thinking on the right page, we can talk about income and estate taxes. đ Besides, going to an unfamiliar bar to drink by yourself is pretty lame.

13. RacerX says:

I think it is a wonderful story, but leave storytime for a moment and look at the UK and Ireland. Compare when the UK had an effective 90% tax…Those making money fled!

How did Ireland right itself? It lowered taxes to bring jobs in.

Beating the rich will get you elected and empty the coffers!

14. EA says:

Hmm, interesting allegory. Let’s extend it a bit further:

The rich man, having been badly beaten, decides “I don’t need anybody else. My riches are sufficient, and all these poor people are living off my sweat and hard work! I’ll form my own society, where these types are not invited!”

The rich man forms his own society where he can enjoy the fruits of his labor. However, he quickly discovers that no one takes this strange foreign currency, “US Dollars”. Additionally, his new society doesn’t seem to value his ability to sell real estate over the internet, or collect rent from his income-producing properties. “Why can’t you make us a shoe, or build a house?” they ask him.

Now desperately poor and alone, the formerly rich man wishes he could pay his taxes and thus retain his feeling of superiority over his former friends.

15. Ron says:

Some of these comments are really amazing. I forget sometimes just how much “rich” people are hated.

I realize as a country people will never be in agreement as to what confiscatory taxes should be spent on but in our 200+ year history when did it become okay to take more from your neighbor because you don’t have as much as he? And on top of that berate him for having some left over?

Some of the commenters here have provided the same tired comments on many other sites. They’re trolls. But for the others who honestly feel that it’s okay, by threat of force, to take money from one American and give it to another I have to ask…how is that fair?

Ron

16. Anonymous says:

Here are some points to think about:

Due to the mass circulation of this email, the Professor, Dr. Kamerschen, has denied having anything to do with it. I can only assume that is due to its simplicity. If you google his name, that is the first thing that pops up.

Overall, it sounds good. I would say the alluring part of, âHey that makes senseâ, is that you canât argue with the math (fractions) incorporated in the analogy. What you can argue with – is the analogy though and how the numbers are applied.
I have my reservations on this analogy for one major reason, the fact that it simplifies the entire social economic makeup of the country by trying to suggest it with percentages of tenths and placing the super rich with the poorest of poor at the same bar drinking the same beer.
For example, the email labels the country makeup into basically 7 classes â which is close to what most people would use. Most people look at it this way: you can break the US into 6 classes â Upper Class (Rich) 1%, Upper Middle Class 15%, Lower Middle Class 30%, Lower Working Class 30%, Lower Working Poor 30% and the Underclass (Poor) 12%. Now the emailâs analogy tries to throw 10% of the population as the rich people paying all these taxes and unfairly treated by tax returns and that 40% are ungrateful no good rift raft, who doesnât work or pay their share, but gets to enjoy the beer. Is that accurate? If you divided the country up per 10 people in the bar, it would be 0.1 persons being the rich guy and 1.2 persons being the destitute poor â with the working and paying stiffs in middle being 8.8 people.
The email leaves out what percentage (%) of the rich guyâs total yearly income he is paying towards taxes though, as compared to the rest.
I have a question; does the entire 12% of the population in the destitute class get everything free? And with that said, are they drinking the same beer as the rest of us, or even the upper 1%. I think the upper 1% is drinking something a little bit different than those 4 guys or actually 1.2 guys on the bottom.
If you look at unemployment rates, it would be something like 0.5 people not able to contribute to paying for the beer. If I keep defending the super poor point, I might start sounding like Mother TeresaâŚ
Letâs look at the middle. While researching, I was a little annoyed to find myself not as well off as I might think. Most people I know think that the tax cuts for the rich include them. The upper middle class is described as white collar with graduate degrees, middle and upper management, with \$100,000 income. The lower middle class is the bachelor degrees white collars and specialty trade college or high school educated making up to \$75k. The Lower classes of the working class and working poor, key word âworkingâ, are those in the blue collar world, repetitive manufacturing positions or service industry making \$20k to \$40k (hell that even sounds like the teachers of our children). The underclass, or the destitute, of coarse make something around 0 to I think \$12k (that makes up some 37 million people â lazy bastards â all of them)âŚ.I guess I am lower middle class after all.
The upper class, comprising of 3 million folks out of 304 Million, make \$350,000 per year or more. Most of them are executives of companies, inheritance winners, or specialty rich (sports, entertainment etc.) I would like to see what percentage of those people started out in the lower or upper middle class and worked hard and smart to get to the upper class. I fear that the number isnât too high and the odds might be stacked against meâŚbut I will dream and I will try. But if I do make it there, I doubt I will be complaining about paying 30 something percent of my earnings to the government. I think right now it is less than that.
I think that most societies of the past worked well with having a happy middle and not too big of a poor class. Once you get too much descent with the masses (301 million people compared to the 3 million that the below email is scared of), you can have chaos and rebellion.
Would all 3 million of the super rich leave us and go to other foreign countries to spend their money? Is this really a good analogy to use? Some may say that most of the 3 million wouldnât be where they are without the spending and working power of the middle class (you and me). The beer/bar analogy is making it sound otherwiseâŚâIf it wasnât for the rich, I guess there wouldnât be an America.â I thought if it wasnât for the great middle class there wouldnât be an AmericaâŚthat is what built this country, right.
Letâs not confuse a rich person with corporations, even though they are considered the same under the law in regards to rights. Corporations move their money overseas, not people.
So, is the tax analogy correct or is it actually paying the correct picture? Were the numbers used describing reality? Do you and I pay the same percentage of our yearly wage the same as those fortunate enough to have so much wealth?
If you were so filthy rich, would you mind paying for a poor manâs beer? Are other countryâs better at treating their rich, or do they just have too many poor people and not enough middle class to support the prospect of becoming rich? I would think that more baseball stars would live over-seas. Why hasnât Bill Gates moved toâŚâinsert countryâs name who tax their rich less than the USâ.
Darn those politicians trying to give those lower middle class people less burden. They must know there are 182 million people in the low mid to working classes who vote.
Finally, a word from the great Lady of Liberty herself, “Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door” -from “The New Colossus” by Emma Lazarus (on pedestal of statue).

My ten cents or sixteen.

17. Steven Cook says:

The most important detail left out of the story is that the 10 man ( the wealthiest one) owns the bar.

18. Brooks says:

Steven Cook, you seem to have missed the analogy. The 10th man doesn’t own the bar… The bar is the government charging the taxes.

• humanity says:

i don’t think he did

It’s amazing to me that guys like Average American, rhbee and others have this attitude that the rich got rich on the backs of the poor. A lot of people got rich HELPING the poor. Ever hear of Wal-Mart? Sure, it’s popular to bash Wal-Mart for it’s low wages and poor to non-existent health insurance, but remember, they manage to provide decent products at very low prices. The poor now have access to products that they would have otherwise had to go without. Plus, Wal-Mart pays what the market demands for retail jobs. Wal-Mart hasn’t chained any of its employees to their jobs. If the greeter at Wal-Mart doesn’t like his minimum wage job and lack of health insurance, he should seek employment elsewhere. If that’s the best he can do, due to the many mistakes he’s made in life (dropped out of school, criminal history, drug history, etc.) then that’s his problem, not Wal-Mart’s. What happened to reason and responsibility in America?

20. Anonymous says:

Alright kids, lets analyze how legitimate this assessment really is.

Clearly the metaphor is directly correlated to income tax, so lets take a look. First of all, are 40% of Americans not paying any income tax (note that the story says “the poorest”, not “the poor class”. It’s simply a relative term stating that those four men are the poorest out of the ten)? The answer: Yes. According to TaxFoundation.org, 44% of the U.S. population does not pay income taxes. 75% of this section of the population earns under \$20K a year, and 97% earns less than \$40K. Fewer than 1% of those who pay no taxes earn more than \$75K a year. So four out of the ten men not paying anything is a fair claim.

What about the rich? Is the richest man really shouldering 59% of the total bill? Yes. According to the Tax Policy Center, the top five percentage (wealthiest) taxpayers in America pay about 59.2% of all the income tax. Since we can’t have half a person, we round the five percent to ten (one out of ten men) for the sake of preserving the ratio in blocks of ten. So the rich man supporting as much of the bill as he does is also a fair claim.

What about the nine other men ganging up on the tenth man? Well, as we can tell by several of the postings here as well as how the public’s general opinion on the tax system is “pass the rates on up!”, we can safely say, yes.

Would the tenth man really leave? Well, the tenth man may not physically leave, but his money will. The tenth man can easily invest overseas if he feels a better, less hostile opportunity to make more money awaits (see RacerX’s post, perfect example). Why do you think there’s been so much outsourcing to China? You can argue ethics and greed all day, but the simple fact is the rich will invest overseas if they see it as more profitable. Thats how America got started (foreign investors clamoring to give money to people like Carnegie and Rockefeller as they started up industries in steel and oil, and the influx of cash promoted cash flow and grew the economy, as well as gave America a chance to rapidly expand and industrialize), so why muck it all up by throwing even MORE taxes towards the rich?

Mr. AverageAmerican did bring up a good point in the first half of his spiel about factoring in things like Social Security and sales tax. But thats just it. In ratio to income tax, Social Security tax, Medicare tax, and sales tax are all much smaller. Thusly, if the large burden of income tax is released off of these “poorer” men, they should be more than able to pay their SS, Medicare, and sales taxes comfortably without taking a significant blow to their budget (unless they’re burning money on booze, cigarettes, and lotto tickets now, are they?). As far as the random nonsequitorial garble about Limited Liability Companies and a low-rent apartment that the rich man is graciously letting the poor men stay in, it is not only utter bull but also completely irrelevant to the metaphor.

Overall, this metaphor is a pretty accurate representation of the federal tax system. Remember, kids, that our tax system is progressive, meaning the more you make, the higher percentage you pay. Naturally, those who pay a higher rate are entitled to more “breaks” because they’re paying a higher tax percentage than you are. If we had a flat tax rate *cough* fair *cough*, where everyone paid the same percentage of their income, regardless of amount of income, then of course this would be outrageous. But since they’re paying a higher percentage, its only fair that they have more opportunities for said “breaks”. Besides, the poor have it pretty well off as far as income tax goes (40% don’t pay taxes, remember, and 97% of the zero-tax filers are making under \$40K a year, many also receiving tax credits).

Aside from all of this logic, I think that Ron brought up an excellent point (and Level Headed certainly lived up to his name). Just because someone has more than you doesn’t give you a right to take from him because of it. A man is entitled to the sweat of his back. Thats what America was founded on, opportunity. Now, I know Anonymous said something earlier to the effect of “if I were that rich, I wouldn’t mind paying 30 something percent of my earning to the government.” Well of course you wouldn’t, because thats all based on perception. Walk in the shoes of someone who is truly poor, who struggles each day to make ends meet and keep food on the table. He is sitting there thinking “If only I had YOUR income, I wouldn’t mind having to pay income tax then, because I’d be able to feed myself and not struggle to pay my bills as I do now.” Everyone will always want what they don’t have, and take for granted that which they do. That poor man wouldn’t mind paying the tax bracket you’re in if he could have your lifestyle, just like you wouldn’t mind paying the rich tax bracket if you had their lifestyle. But does that mean that because YOU wouldn’t mind means they should receive more taxes? Of course not. They are entitled to have what they have made, just as you are entitled to have what you have made.

It’s scary when I read over these posts, seeing so many condemning the rich and wanting to make them pay more and more into the system. Wanting to take from someone because they have more than you is walking a dangerous line. Taking what you have and giving you what you “need” is socialism/communism (the idea that looks great on paper but ends up degrading the standard of living tremendously when put into practice (*ahem* China, Cuba)), and that’s not the principle America was founded on. What you “need” is determined solely by the controlling government, as well as how your “needs” are provided for. If you prefer a society where the rich have much more taken from them to the point where everyone is left with the same amount of money, and that collected money is turned around to provide what you “need”, go grab yourself a dinghy or a door and start paddling to Cuba, because that’s not how America runs. Thusly, trying to take more and more from the rich to disperse among the people is leaning dangerously close to a socialistic attitude, which will not give people the opportunities they have with our current system of government and tax law.

I hope this clarified the metaphor and helped recognize its validity as well as answer some of the questions and comments put forth in previous postings. Feel free to look into some of the sites and organizations I referenced, learning about the tax structure and who pays what is rather interesting once you start getting into it (hence I was able to interject when I stumbled upon this clever metaphor).

-Incognito

21. wendy says:

have read all of the posts and find this a most interesting discussion. i was the lower working class, making 30k per year before my position was eliminated several months ago and am now unemployed. i wasn’t able to attend college as neither my parents or i were able to afford it. i am very glad for those who have achieved something of themselves through their hard work, rather than being born with a silver spoon in their mouth. and i agree that the more ‘you make, the more the government takes.’ and i’m sure that most of the people making posts are upper middle class or higher, defending their standard of living. tax breaks for the rich for creating decent jobs(rather than moving their production overseas or to south america) are great and generally accepted. i think the big thing that upsets us ‘working poor’ is the fact that they get tax breaks on anything from purchasing a yacht to being able to write off lavish parties if they’re written up under a business expense. besides, would highly doubt that bar patron #10 would be drinking beer in a bar with those who are lower than his peers!

22. Gary Kroeger says:

Loose Stool Economics

10 men go out for a beer and the bill comes to \$100. They decide that the only fair way to pay is that each man pay for himself. So each man paid the bar \$10 and the bar got \$100.

The next day only 6 showed up. “Where are the other guys?” the richest guy asked.

“They don’t make enough money to go out for beer every night so it will be just the 6 of us,” said his middle income buddy. So they paid the bar \$60.

The next evening came and only 3 showed up. “Where are the other 3 guys?” asked the rich guy.

“Bob’s company is laying people off and he figured he better tighten his belt. Jim’s son is going to college next month and Ray needs minor surgery so they won’t be in for a while. So they settled their bill and gave the bar \$30.

The next night only two men arrived and noticed that Jenny the waitress was missing.

“Where is everybody?” asked the rich guy.

“The bar isn’t making enough and had to lay Jenny off. Bruce’s wife lost her job and their mortgage went up so he won’t be in.”

They paid the bar \$20 and left.

The next night the rich guy showed up and no one else was there. He sees sign on the door: Closed for lack of business.

On his way back to his car he’s stopped by a guy in an apron. “I was the dishwasher here and now I’m out of work, can you spare some change?”

The rich guy throws some quarters at him and gets into his Mercedes.

And that, boys and girls, journalists and college professors, is why the tax system is the way it is. There is no economy when only the rich have money to spend.

23. Gary Kroeger says:

No, Level-Headed, WalMart does not “help the poor” the poor help WalMart. WalMart is a multi billion dollar corporation because poorer Americans can shop there; because they sell many products at discount, because thats where the margin lies. Our economy is run on the money consumers have to spend. It doesn’t matter how many widgets you can make, if no one can buy your widgets; if they can, you will be successful. Level-Headed says “the greeter should get another job if he doesn’t like his minimum wage.” What world are you living in? Are you serious? Such arrogance!

Someone else writes “why should the rich be punished?” Punished? Where is the punishment from being wealthy in America? You’ve got to be kidding me. And NO, most rich people are not the fairytale success story of rags to riches, most were born into affluence or at least a level of comfort that allowed for the education and skills to succeed.

24. Michelle L says:

Many people think that if an increase in earnings moves their salary to a higher tax bracket, Their entire salary will be taxed at the higher rate. Is this true? Give an example to justify your answer.

25. John says:

Nobody has pointed out the obvious. If the bar (government) would lower the cost to all the men the rich man could hire his unemployed drinking partners with the money he saved. Now both benefited. How the F\$@*ING hard is that to understand. Stop ripping on the rich, they provide a service for all the money they have received….a service which was obviously worth more than the money they received or people would have kept their money and not bought the product from the rich man.

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