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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.
posted (originally) on 7-11-2008 @ 10:22 AM this post Oh, For The Love Of....!
This is the most shocking example of mathematical illiteracy I've seen in a very loooong time!
And I've dealt with A LOT of math Illiterates! (Most of them CPA's!)
Very well, School's in session. Pay attention.
10 people. Bar tab for beer= $100
If each paid an equal amount (Fair Share) towards the Tab, each would owe = $10
10 people X $10 = $100
However, per the provided example, 4 of those folks were required to pay nothing, therefore: 10-4= 6.
6 people were left to pay a $100 beer tab.
If each of the remaining 6 drinkers were to pay the same amount toward the bill, each would have owed approximately $16.67
$100/6 = $16.666666666... (rounded off to : $16.67)
Now, instead of dividing up the bill equally amoung the remaining 6 drinkers, they decided to pay based on their perceived ability to afford the expense. The named "Professor of Economics" thusly likens this method to the current income tax system.
Therefore the break down of the original $100 dollar tab looked like this:
Drinkers 1-4 pay - $0 or 0% of the tab
Drinker #5 pays - $1 or 1% of the tab
Drinker #6 pays - $3 or 3% of the tab
Drinker #7 pays - $7 or 7% of the tab
Drinker #8 pays - $12 or 12% of the tab
Drinker #9 pays - $18 or 18% of the tab
Drinker #10 pays - $59 or 59% of the tab
Total $100 or 100% of the tab
Got that?
Pay attention to the Percentages
paid by each of the drinkers. This is where the good Dr. Kemerschen "falls off the wagon"!
In the example, the barkeep, in a show of generosity, gives the drinkers a $20 "rebate". This effectively reduces the beer tab to $80 for the 10 drinkers.
$100 - $20 = $80
Of course, since 4 of those drinkers didn't pay anything in the first place, the remaining 6, paying customers are left to divvey up the windfall.
If the drinkers would have stuck to their original plan, as they devised for apportioning the bill, the split would have been easy;
Each payer would have received a portion of the refund equivalent to the portion (percentage) of the bill he paid. Thus:
Drinkers 1-4 paid $0 get $0 back final amount paid = $00.00
Drinker #5 paid $1 gets $0.20 back, final amount paid = $00.80
Drinker #6 paid $3 gets $0.60 back, final amount paid = $ 2.40
Drinker #7 paid $7 gets $1.40 back, final amount paid = $ 5.60
Drinker #8 paid $12 gets $2.40 back, final amount paid = $ 9.60
Drinker #9 paid $18 gets $3.60 back, final amount paid = $14.40
Drinker #10 paid $59 gets $11.80 back, final amount paid = $47.20
Original Tab $100 minus $20/20% rebate = final tab $80.00
The good doctor tried to mislead us into believing in the inequity of the tax system by erroneously attempting to equally divide the $20 refund offered amoung 6 recipients, when, in fact, those recipients, by virtue of the fact that they had not equally contributed to the expense (the original bar tab, or by analogy, the income tax) were not equally entitled the same refund.
The tax system does not work that way.
Our tax system is geared such that the more you make, the more you (should) pay. And the more you have paid, the more you should get back, when it is due.
Ah well, I guess it is true;
PHD = Piled Higher, Deeper!
CleanCare
Stumbled on this on the internet. I just had to share.
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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.