Safe Speed Forums

Suppose that once a week, 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.
And the tenth man (the richest) would pay £59.


So, that's what they decided to do.



The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly 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 realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.



So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided 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 (a 100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the first four continuing to drink for free.



But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," 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 £1 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 only got £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 week 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 to pay 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 might 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible

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"The road to a police state is paved with public safety legislation"

But, you forgot about those on a pension. With several pensions, HMRC sent out multiple tax codes , baffling the OAP. asking for an answer ,the OAP got several answers. His pension might be paid in advance or in arrears- no problem to HMRC- it was all going to come in at the same time. THEN OAP found out that he was entitled to pension credit ,and more. But HMRC still said "on our reckoning you might have to pay tax", whilst Dept of pensions said the pensioner was entitled to pension credit, and more . Baffled- yep- most pensioners are . Welcome to UK Limited .
I'd suggest that those in employment do nothing to provide for a future ,as the system is designed to claw back anything they put away .

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lets bring sanity back to speed limits.
Drivers are like donkeys -they respond best to a carrot, not a stick .Road safety experts are like Asses - best kept covered up ,or sat on

Ah, but how did the richest man get his money in the first place? Exploitation of the poor?

Taking a snapshot, or watching a preview, isn't the same as watching the whole film. We're all equal but some are more equal than others perhaps...

The devil is in the detail$. Things, people, get what others are willing to pay, not what they are worth. The English football team proved that, again, like all the other failed overpaid sportsmen we could mention around the world.

Mine's a Becks please Mr Diamond, you can afford it thanks to the likes of me.

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The views expressed in this post are personal opinions and do not necessarily represent the views of Safe Speed.
You will be branded a threat to society by going over a speed limit where it is safe to do so, and suffer the consequences of your actions in a way criminals do not, more so than someone who is a real threat to our society.

The way to understand how you feel about the story in the original post is to consider how you would apportion an INCREASE in the cost of the drinks by the landlord. Should anyone get drinks for no cost?

The fact is that a very small number of taxpayers pay the lion's share of the tax. We already have a very socialist redistributive compact in the U.K.

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Malcolm W.
The views expressed in this post are personal opinions and do not represent the views of Safespeed.

It is also forgotton that the world is a far more mobile place than it used to be. Treat the wealthy "Unfairly" and it is very easy for them to leave the party! (As the French government is about to find out!) Rememeber that Facebook guy who promptly emigrated from the US to avoid being stung for a couple of billion in tax (Well, wouldnt you??) see http://www.forbes.com/sites/danielmitch ... ax-policy/

And everybody seems to forget the "Thatcher Lesson" (You get more overall revenue from higher rate taxpayers if you cut tax rates than you do if you raise them)

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"The road to a police state is paved with public safety legislation"

Some research has been done on the rate of tax which optimises the income. You probably won't be surprised to hear that this is about 40%. Above this it becomes increasingly effective to undertake avoidance schemes (which are legal) but at 40% it's hardly worth the fees. Reducing the additional rate from 50% to 45% and thence to 40% again is not such a silly idea.

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Malcolm W.
The views expressed in this post are personal opinions and do not represent the views of Safespeed.

FYI

http://davidk.myweb.uga.edu/

It doesn't really matter who originated the apochryphal story in the first post, it is still basically valid.

It demonstrates the poor reasoning of many people about relative benefits and their lack of understanding about who pays for society. Fairness is not equivalent to everyone being put in the same absolute position.

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Malcolm W.
The views expressed in this post are personal opinions and do not represent the views of Safespeed.