2012-027 The risks of overtaxing the rich


It is Socialist policy to tax the people who have generated wealth to distribute to those who have not. If you give people freebies they will vote for you.

But they should take heed of this tale.

Every day, ten men went for a beer to the same bar and the bill for all ten came to £100.

They paid their bill the way we pay our taxes, 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 (a wealthy self made man) would pay £59

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the bar owner threw them a googly.

‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer bill 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? How could they divide the £20 windfall so that everyone would get his fair share?

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 a £1 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.  He was so upset he left the country and took his money with him.

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!

No    Tax the Rich: An animated fairy tale http://youtu.be/S6ZsXrzF8Cc

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.