Posts Tagged taxes

Things That Should Cease to Exist

Dec 2nd, 2008 Posted in In Claire's World... | no comment »

I joke about things that I think should cease to exist with my friends. Ok, maybe ceasing to exists is a little harsh, but these are things I definitely dislike to say the least. So far on the list are:

1. Berries
I’m weird, I know. I’m quite aware of the fact that this makes me look ridiculous and immature, but I absolutely can’t stand the smell or taste of any food with the word berry in its name. I repulse berries as if they were hazardous to my health and safety. Oh, wait, maybe they are hazardous to my health and safety, because I might freak out if I eat one.
My roommate’s ex roommate (Confusing, isn’t it? This person is not me, even though I may have made it sound that way. The keyword here is ex, in this case from last year) had a theory that I was really subconsciously afraid of berries and that I was scarred from something that had to do with them. Maybe they killed or seriously injured me in a past life. Or maybe I was stranded somewhere, and the only food I got to eat was berries. Or maybe I at a poisonous berry and died.
If you know me in real life, you probably have seen or at least heard about my extreme disdain for berries. I understand that it seems irrational to the normal person, and I’m open to any theories for its explanation.

2. Libraries
Haha, maybe this is just an inside joke between me and my book/library loving friends. Realistically, I don’t really think libraries should cease to exist, because they have proven to be a valuable asset to those who take advantage of them. Compared to the current wasteful spending of our tax dollars, I would say that libraries are not a bad deal at this point in time.

3. Taxes
This goes together with libraries in a way, but not really, so I made it a separate item on the list. In reality, a certain amount of taxes are necessary if there’s a government. However, I do believe that the current United States government and separate state governments are overtaxing and spending inefficiently. For every dollar the federal government receives from our taxes, they have to spend two, no matter what. Rather than taxing us constantly and using the tax dollars to interfere with our lives (like bailing out companies that deserve to fail with $700 billion), the government should just tax us less. Simple, isn’t it?

Haha, I like how the berry explanation, the weirdest one on this page, was the longest. More to come as I build this list.

Barstool Economics

Nov 29th, 2008 Posted in In Claire's World..., Money | no comment »

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 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!”

So, 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. From Mike (Corporation and the wealthy are already doing this!)

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
Oh, and I originally found this on Billy’s facebook note.