The US Tax System Explained in Easy Terms....

The US Tax System Described With Beer Analogy

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!”

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.

One small problem with your analogy, darling. If the wealthy go abroad to drink, they'll wind up in the clink. The IRS, FBI, SEC, and other organizations are just itching to bust tax cheats. In fact, the last big bust was 2 years ago. Loads of money were found in Swiss bank accounts. Rich people beware! Be a good patriot-pay your tax!!!!

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. Originally Posted by ScarlettKiss

You mean in France or Germany or England....where they have a civilized healthcare system, an educational system where they teach their kids not to believe stupid ass drinking analogies as some sort of tax laws!

You mean in France or Germany or England....where they have a civilized healthcare system, an educational system where they teach their kids not to believe stupid ass drinking analogies as some sort of tax laws! Originally Posted by WTF

I agree with you in spirit, WTF. Please don't be hard on Scarlett. She was only trying to be humorous. Perhaps this post belongs in the Comedy Central section of the site.

I agree with you in spirit, WTF. Please don't be hard on Scarlett. She was only trying to be humorous. Perhaps this post belongs in the Comedy Central section of the site. Originally Posted by Casanova69

I'm sorry Scarlett......I mistook you for Whirlybird. That stupid SOB post so much ignorant chit, I thought he had slipped out the nut house again.

Please forgive me!

Ok, Scarlett is an idiot, but no one attacked her analogy, or found a flaw in it. Methinks some are too deeply in debt to their ideology to listen to reason. Sad.

I thought Scarlett was dead on.

Ok, Scarlett is an idiot, but no one attacked her analogy, or found a flaw in it. Methinks some are too deeply in debt to their ideology to listen to reason. Sad.

I thought Scarlett was dead on. Originally Posted by CuteOldGuy

Scarlett is not an idiot.

You are the idiot if you believe that analogy.

I actually attacked it.


Where the fuc do you think the rich guy is going to go. Europe? Where they have socialized medicine.

You might be cute and you might be old but you damn sure can not read/
comprehend worth a damn.

Ahhh, the current state of debate. People cursing and jumping each other's asses.

Way to take a funny post and turn it into something it is not.

Ahhh, the current state of debate. People cursing and jumping each other's asses.

Way to take a funny post and turn it into something it is not. Originally Posted by Boltfan

no people on the right actually think this is how the tax syhstem works! They get the majority of their tax advice from their bartender and the political advice from joe the plumber.

Hmmm, how many times do you call a toll free customer service number and get an American? Mine are all in India! How'd that happen?
And I thought the car makers moved to Mexico? What happened to Detroit?

But hey, the Koreans are bringing their car manufacturing business over here to Alabama so we must be doing something right.
We've also got a new jet engine manufacturing plant going into Auburn in 2012. (I think that's Boeing, but don't quote me)

Thanks for being easy one me guys! And I am trying to just be a little humorous.....I've always loved that little analogy.

Scarlett is not an idiot.

You are the idiot if you believe that analogy.

I actually attacked it.


Where the fuc do you think the rich guy is going to go. Europe? Where they have socialized medicine.

You might be cute and you might be old but you damn sure can not read/
comprehend worth a damn. Originally Posted by WTF

Like I said, the current state of debate. WTF thinks he is right. Get out of the way.

Like I said, the current state of debate. WTF thinks he is right. Get out of the way. Originally Posted by Boltfan

but he's gonna post anyway

I ask you WTF, WTF!? I was being sarcastic about her being an idiot. She obviously isn't, because she pretty well nailed our tax system. If that isn't how it works, please explain. I thank you in advance for the superior knowledge you are about to impart.

Like I said, the current state of debate. WTF thinks he is right. Get out of the way. Originally Posted by Boltfan

This is like a debate on Bush knowing about 9/11 beforehand.

I am not debating this stupid analogy.

Our tax system is so fuc'n complicated that a joke about ten men in a bar will not explain it. But if you are dumb enough to think it does, I will have to get in a zinger or two.

I ask you WTF, WTF!? I was being sarcastic about her being an idiot. She obviously isn't, because she pretty well nailed our tax system. If that isn't how it works, please explain. I thank you in advance for the superior knowledge you are about to impart. Originally Posted by CuteOldGuy

Listen cutiepie, it isn't my job to explain to ypou how our tax system works.

If you think this is how it works, I ain't about to waste my time explaining just how wrong you are. It would be like talking to someone that plays Beatle records backwards and hears things. If you think Paul is dead, fine.

Since WTF doesn't have the mental capacity to see the humor and simplistic view of the analogy, I would hazard a guess that the Wizard of Oz allegory would simple make his head pop like a pimple.