One of my richer Republican friends sent me this article to change my views on economic policy (I have my own little analysis at the end):

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 wi ndfall 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.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

Okay, first off, this paper has been floating out on the internet for a few years now and from what I’ve learned, Dr. Kamerschen didn’t write this paper.

I feel like I keep having to go back to the same point over and over again with these people.  Yes, I agree that because more tax money is coming in from the rich than from the poor, if the rich stopped paying taxes, the country would crumble.  But the caveat is that if the rich do not give enough money through taxes, the country won’t be taking in enough monies to pay down the principle on our national debt, we’ll end up paying interest on top of interest, the national debt will rise, hyperinflation will set in, and then everyone’s money will become less valuable.  (At this point, the bar burns down and everyone — poor, middle-class, and rich alike — all go down in flames with it).  Also, studies have shown that a greater percentage of people in the top tax bracket, as opposed to those in the lower tax brackets, fudge their tax returns to report lower profits and greater losses, so as to avoid having to pay higher taxes (the rich guy fudges how much money he can actually provide for the beer… instead of the agreed upon 20% that everyone else is paying, he says he can only provide 10%, 8%, or even 0% of the cost of the beer).

Also, given the fact that UBS was just sued by the US govt for the names of US millionaires accused to using Swiss bank accounts to commit tax evasion, you really could argue that you can’t trust the 10th guy to honestly uphold his end of the bargain.