The Tax System Explained In Beer
I received this note via email. I did not write it. However, as you will find in other articles that I wrote shown on this site, the theme is similar. I wrote an article cautioning that many rich expatriates left America for more friendly surrounds because of how poorly they are treated by the IRS and our government. A write sent in a counter argument and said basically that these rich people hate AMerica and that is why they left, and basically he said to hell with them. This little email makes my point better than I ever could. After you read it, go get yourself a nice cold one!
Here it is:
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.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffec ted. 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 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 dollar 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 dollar 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 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 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 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.Add a comment
Top taxpayers beat it to Britain
Nobody likes being mistreated!
Why are over 200,000 rich, former American residents, living in London? Why do they make the UK one of the largest American communities outside the US? The simple answer is because they can. Millions of American expatriates have created homes abroad to �Escape America.� We have always been fortunate in America that the high wage earners pay so much of our tax burden. Few of us take the time to thank the rich for taking the wrath of the IRS on a continuing basis. Maybe it is time we start.
Passenger train service sorely needed in the US
Mostly kudos to Mark Guydish for his piece titled, “Romney should talk to the real people who use Amtrak.” My only negative is that it was a bit more political than it needed to be. Republicans do not like to spend money on social projects and Democrats like to spend money on anything that gives them credit for being the good guys, though the spending may be fiscally irresponsible. Romney’s reaction to rail is reflexive and he may never have ever had the need to take a train. That does not rule him out as a good presidential choice. However, he and the GOP need a wake-up call on what is best for America in this instance. Add a comment
What happened to the Democratic Party?
Times Leader Published this with a different title.
Would the hard working parents of the baby boomers not be surprised?
Something happened to the Democratic Party since I first joined. I was just twenty-three years old. I spent my first two years as a voter registered as an Independent and then my father helped me understand that in PA, being Independent meant that I could not vote in the primaries. So, I changed from Independent to Democrat, like my dad. We were very close and talked a lot about how things were in America and in the neighborhoods for years and years.Add a comment
Sell PA State Liquor Stores by public lottery
It looks like this time our state stores will be privatized.
Why should John Q. Public not gain from the expected privatization of PA's liquor store system? Many people in the Commonwealth would like to have competition in the liquor business, and now that it seems likely, there is speculation that some big fat PA cats will take over the whole enterprise, make out like bandits, and then Pennsylvanians will be left holding the proverbial bag. How would it benefit the people, for example if some well known local billionaire or politico starts a chain of Liquor Stores? The last thing that Pennsylvanians want is to go from a state run monopoly to a monopoly with those on the "in" making out like bandits, and life being worse for the rest of us than when the government ran things.
Was it Sergeant Schultz or Obama who suggested sequestration? Part I of II
by BRIAN KELLY on FEBRUARY 19, 2013 Print This Post
On January 1, 2013, Republicans caved again to avoid the impending fiscal cliff disaster. Congress agreed to put off the sequestration part of the fiscal cliff until March 1. It also agreed to keep the Bush tax cuts in effect permanently for those families making less than $450,000 per year. For all others, the income tax rates climbed. Add a comment
Obama changes focus from gun control to football control Part III of III
by BRIAN KELLY on FEBRUARY 12, 2013 Print This Post
What do you think are the most dangerous occupations in America? Would football for most Americans even come to mind? So, why would a president, ostensibly concerned about the health and safety of all Americans not have picked the most dangerous occupations in the US upon which to focus his attention? Why football instead? Add a comment
Obama changes focus from gun control to football control, Part II of III
Published on FEBRUARY 7, 2013
During the Communist regime, there are many stories suggesting that, vodka was the only thing that kept the Russian people going. Only in their intoxicated dreams did they find hope. After live NFL games are shut-off completely, Big Ed from MSNBC, a soothing network personality, who seems to enjoy running continual interference for the president, might suggest that the consumption of vodka should remain legal for those watching reruns of the games. Add a comment
Obama changes focus from gun control to football control, Part I of III
Published on FEBRUARY 5, 2013
The Obama agenda is so full of controls for we the people that his controls need controls. This President is such a nice guy and so much smarter than everybody else that he is happy to use his unlimited power and energy to control our lives in more and more ways. Without his guiding hand we would be lost. Add a comment
My country ‘tis of thee: Time for Americans to pay attention. Part VII of VII
My country 'tis of thee: Time for Americans to pay attention. Part VI of VII
Published JANUARY 29, 2013
John Locke had a plan for the best government possible. Yet, even with Locke's writings as a guide, the founders depended on the good will of the governed (that's US) in order to make the process a success. The founders were not infallible in creating the US as a republic. Yet, they tried to do the best job possible at the time. Freedom and liberty were the most important proclivities of all of the colonists. The role of the people continues to be attentive and to be sure that the government operates on our behalf. Why would the founders have ever considered that those that could be free forever would choose subjugation for a small token from the government? Add a comment
My country 'tis of thee: Time for Americans to pay attention. Part V of VII
My country 'tis of thee: Time for Americans to pay attention. Part V of VII
by Brian Kelly on January 24, 2013
Now that we have exercised our way through four parts of this essay, is there anybody out there who cannot tell me why the US is considered to be a constitutional democracy or whether principles of direct democracy should or should not be used to help us out at the national level? By now, those, who do not know these answers, who really want to know, already know that they may choose to reread the prior sections of this article. If my work is not enough, feel free to do additional research, perhaps on the Internet, an often fine source of information about our founding. In all cases, please pay attention.
I humbly request that my readers be honest with yourselves and eventually, even if you don't quite get it all yet, know that you will. I have recently been influenced by Rush Limbaugh, who believes all writers and show hosts must begin to attempt to bring in the low-information voters to help them learn what they must do to become better Americans. I agree with Rush's premise but, as a natural skeptic, I await his plan.
This column is not destined to become a slow-learners guide to American Democracy, but there will be times that I reach out a bit so you and I can help those who do not know what we know about our government. I think there must be some way that we can help a lot of good Americans to know that they are not being served well today by the US government. There is always hope that if we can help our fellow Americans understand the beauty of the American system, like US, they too will be upset when our leaders choose to not do their jobs.
The principles of our nation is a really fascinating topic. As a professor at heart, I am prepared to help those who want to learn or who need clarification. I promise to answer any direct question in the comments section of this article for any part of this essay that I may have left fuzzy. Feel free to ask your questions. You may choose to wait until the other two parts are posted for the answer may be there; but do not feel constrained. I will follow this article and will respond to your comments.
A practical exercise in understanding our government is to simply watch the news and / or read the papers. But, with a corrupt press, you and I must always carry with us our Dick Tracy wrist-band lie detectors, to assure we are getting the truth. Just don't let that crafty "little face" guy talk you out of any of your own original thinking.
When you watch or read or listen to the "news," please do not believe everything you see, hear, or read. Too many of US know that the Obama government is not operating under the Constitution, and we all wish that the rest of America knew what we know.
On the left, there are leaders who do not believe that the precepts of democracy or republicanism are even important. This fact can be verified simply by observing the actions of recent and current Democrat-controlled governments.
As a reluctant Democrat, I cannot believe that so many of my fellow Democrats fall for the slop delivered by the mainstream Democratic Party today. If really good people who are pure Democrats paid more attention to their leaders, they would insist their leaders do better for them. Alas, the people as a rule do not pay attention. That, more than anything else, is the missing piece in our representative democratic republic. We would all do well and our nation would do much better, if we all paid attention.
Simply by living in the last twenty years, many Americans who do pay attention have lost their trust in government. The most unfortunate part of that is that we the people have become the problem. We send back the knaves and the thieves and the scoundrels that vow to continue to keep us in this sorry state. We reward our politicians by reelection even when they serve US poorly.
Just yesterday, on her role in the Benghazi cover-up, Hillary Clinton, the next closest thing to royalty to our sitting President, summed up the whole hearing in these words: "What difference... does it make?" In other words her being Hillary Clinton is all that really matters, and the lies told won't bring back the four dead Americans. Though she and many others lied to the American people—So what! We can no longer trust the government or the press! That's what!
Even with our own too recent experience, Americans from many descents would still like to be in simpatico with our founders. To do the right thing, we must know what is happening, and we must understand that our leaders and the complicit corrupt press try to trick us into believing their drivel. While England was in control, it helps to remember that none of our founders ever met a government official they trusted. Nor should we!
The founders trusted no leaders and no forms of government. This stems from their own experience and observations in their home countries. Their hope for America was that they would be able to build a long lasting government that would best serve all the people of the United States from then unto the future in the best way.
As the colonists were contemplating a break with England, the motherland for many, the leaders searched for methods of certainty upon which they would be able to form a successful government. In this quest, they were profoundly influenced by John Locke, especially his 1689 work, known as The Second Treatise of Civil Government (1689).
In this work, Locke wrote of his strong belief in natural rights that exist in nature and should exist in government. Yes, it is recommended reading in the study of democracy, republicanism, and government. These rights, according to Locke, include the protection of life, liberty, and property.
A look at Thomas Jefferson's language when he wrote the Declaration of Independence shows how he was influenced by Locke. For property, he substituted the "pursuit of happiness," though in many writings, it was clear that Jefferson had great concern for the notion of private property, and that our government would extend respect to such a basic individual right.
Jefferson was very concerned about government confiscation of any type of property as well the denial of the opportunity for individual gain. And, so, he substituted the word happiness to carry all those notions. And, well it does!
After reading Locke, Jefferson said that "A right to property is founded in our natural wants, in the means with which we are endowed to satisfy these wants and the right to what we acquire by those means without violating the similar rights of other sensible beings." He sent this particular prose in correspondence to Pierre Samuel Dupont de Nemours in 1816. Do any Americans of today fear lack of freedom or liberty enough to even claim to fully understand these words?
According to Locke, government has one purpose—to protect these natural rights. Redistribution of assets from Joe, who earned them to Harry who did not, is not, according to Locke, a natural right. Among other notions, which the founders picked up from Locke was that the new government needed to be a limited government that had constraints that it could never violate. Who sees a big bully government as a friend?
In the President's Inaugural address, he warned us all that the days of big government are back. The Reagan years when individuals were given the opportunity to excel in life without government constraints are over. The president used the word collective to describe his new norm. In days past the collective or the commune was an intrinsic part of another notion known as communism. Just as collectivism, this too did not affirm individual rights.
We have all heard of communism and group-think, with the group of leaders at the top doing all the thinking. In such systems, the people are tricked into thinking we all have rights but individuals in these systems, have no rights. This is not the government our founders chose for us, no matter what the President may think. Be wary. Pay attention.
Primary among the constraints of our limited government was that the new government would be prohibited from ever becoming a dictatorship. Our government would always be based on the consent of the governed, not of some mythical despot or any other non-democratic feel good notion such as group-think. The representation aspect of our constitutional representative democratic republic provides for this protection. The connotation for this can be translated as: "Of the people, for the people, and by the people." I do keep asking myself after the November 2012 elections, "Do the people really care?... Do the people really get it?"
The founders had no implicit trust that any government would consistently do the right thing, and so, from Locke, the founders picked up the idea that governments must provide laws so that people know well in advance whether their behavior would be acceptable. This is why we are a republic. Our basic laws are imbedded in the Constitution.
The Constitution limits our representative leaders in the laws they may bring forth. These limits of behavior, known as laws are framed in our Constitution but more importantly; this same document limits the powers of government in affecting people's lives. Too bad our President and our Congress choose to not act properly regarding these long served principles of limited government. An informed populace would not let government get away with what it does. So, again, my exhortation: "Pay attention!"
Additionally, the founders abhorred the thought of government taking any person's property without his or her consent. Ask yourself where the distributive nature of the current administration fits in with this. Where does it get its authority to steal from one person to give to another? No such authority exists in the Constitution. The laws of which Locke speaks were provided in Jefferson's Declaration of Independence and by our Constitution as our founders directed its purpose: "in order to form a more perfect union."
From 1777, during the Revolution, the Articles of Confederation had been the guiding principles for our nation. The Articles were fully ratified by 1781. Though well written, they were not done well enough for the founders' liking. Enduring until September 17, 1787, the Articles were all the country had to go by. They were the rules of the Republic. However, after three months of debate, moderated by Convention President George Washington, the newly written U.S. Constitution was brought forth. Think of how difficult bringing a new nation forward must have been for patriots such as Washington.
In its preamble, the words, "in order to form a more perfect union," were chosen, because the founders were indeed pleased that they had forged the US government using the Articles of Confederation. Yet, they all knew the Articles did not do the full job and they acknowledged that even this new instrument was not perfect. The Constitution was designated as more perfect, but the implication was that it too still was not "perfect."
And so, this new set of rules called a Constitution created a strong federal government with an intricate system of checks and balances so that America could endure even through times such as now, when presidents and / or congresses would behave in ways that are unpatriotic, and in many ways, anti-American.
The major strength of course in the federal government is that the states have all the power other than those expressly enumerated in the Constitution for the central government. From this comes the notion of a limited central government, which we often call the Federal Government in Washington. The new 1787 Constitution of the United States was signed by 38 of the 41 delegates, who were present at the conclusion of the convention.
Article VII presented the stiffest constraint to the adoption of the document as the law of the land. The Constitution would not become binding until it was ratified by nine of the thirteen colonies which were to become the thirteen United States.
With many more states in the Union, today, Thirty-eight states would be required for the US to ever again hold another Constitutional Convention. Though it is a good idea to have such a convention so that the decisions of the Supreme Courts, many of which have been off the mark over our 237 years, can be reversed and that we can gain good laws or precepts to bind our future as a republic, there are major risks in so doing.
As noted in a prior Conservative Action Alerts essay of mine and others, the US no longer has a free press, and any changes to anything in government more than likely will be presented to the people from the corrupt press's biased leftist view. This influential biased press has very powerful speakers who are good enough to convince one neighbor that it is required to give another neighbor his property, and to be thankful for the opportunity.
With Republicans not being brave enough to tie their own shoes in public, I think a new Constitutional Convention would be devastating for the conservative cause without a Conservative Party per se. From my perspective, the Republicans as a force against progressivism have simply given up. They have failed and all of these RINOs need to be replaced by conservatives in primary elections. Despite their shameful performance, the RINOS will shamelessly again ask for your vote. We can do better but let's talk about that another day.
The corrupt press and the socialists in control of our government are excellent at chicanery and deceit. And, so I caution citizens of the US that before we think a Constitutional Convention will bring us relief, please think about who just got elected President, and think about the notion of the convention changing term limits to give the new president an unlimited term of office. Would our President like to change the Union into an oligarchy or a dictatorship with the "free" press's full approval? We must pay attention so this can never happen! Send only brave-hearted conservatives to Washington.
When you see President Obama backing the notion of a Constitutional Convention, please do not cheer. Remember, his Attorney General ultimately determines and assures the proper functioning of all the voting machines.
To better understand the government of the United States of America, it would help us to review the notion of federalism as established and used in the Constitution. A federal type of government divides the powers between the national (federal) government and the state and local governments.
With federalism as a basis, each level of government has sovereignty in some areas and it shares powers in other areas. Federalism is the great hope of America as long as the states fight for their rights over the notion of a strong, all-powerful central government. A very limited central government is the key to freedom. The Constitution was set up for the states to hold the bulk of the power.
In a federalist system, both the federal and state governments have the power to tax. However, only the federal government can declare war. The founders' intent was to give all powers to the states and only those absolutely needed to the "central government." Today we find conflict between the states and the federal government on many issues.
Using the Constitution as a guide, in these instances, the federal government must back down or a free America as founded will be gone. But, the states must assert their power for this to happen. That is why AG Eric Holder is in court so often. The Federal government is trying to usurp the individual authority of the states while trying to build up the central government. This is not a good thing for America. It is unconstitutional, and the founders clearly have offered this opinion numerous times.
Thomas Jefferson, a brilliant man and a defender of individual rights v. kingly rights would be the lawyer I would ask to defend my abilities to function as a regular citizen in a dysfunctional America. It helps to remember that Jefferson noted that: "all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people." Thomas Jefferson rightfully was worried that those we choose as governors would one day choose to govern without our permission.
On June 21, 1788, New Hampshire signed up to become the ninth state to ratify the document known as the Constitution. Thus, the US was prepared to become a republic. It was subsequently agreed that government under the U.S. Constitution would begin on March 4, 1789. And, so on this day, the US government began with the new and hopefully everlasting Constitutional body of original laws as its guiding light.
Thus, the constitutional representative democratic republic form of federal government used in the US arises from a representative democracy. Adding the term constitutional to democracy for many makes the nation a republic for sure and it implies a number of structural points as follows:
The basic principles upon which the society of the United States of America operates
The institutional forms and processes of the U.S. government
The distribution of political authority among the major offices and institutions of the government
The resulting power relationships among these government offices and institutions
The notion of constitutionalism strengthens democracy and republicanism as it defines the underlying principles under which the structure is to operate. It clearly differs from other forms of government not chosen by our founding fathers, mentioned numerous times within this essay.
These unacceptable types of government as noted previously include monarchies, dictatorships and oligarchies—though many scholars today suggest that the US in practice, with the tacit acceptance of the political class and the governed, is becoming more of a de-facto oligarchy in which the few rule the many.
If the constituents (you and I) were paying attention, this would not have happened. It still is not too late for the people to make a comeback. We must alter the de-facto notion to keep our America more pure. And, so if this is the first time you heard this exhortation, it is time to be alerted and to begin to become active to keep the government "owned" by the people and not vice versa.
The evolution to a strong central government as has been directed by Obama and the White House staff, was clearly not the intention of the founding fathers in developing the outline for our constitutional democracy, which has worked so well for so many years. The more we Americans pay attention and take action based on our observations, the more likely America will remain the shining light on the hill and the bastion of freedom and of liberty across the world, regardless of who the temporary occupants of the White House on Pennsylvania Avenue happen to be.Add a comment
My country 'tis of thee: Time for Americans to pay attention. Part IV of VII
Published on January 22, 2013
Since it has been a long time since third grade for many patriotic conservatives, we can all probably use a replay of some of the great lessons we learned about the founding of our country. So, let us now take some time to discuss some elementary, yet very important terms that are essential in both a republic and a democracy. In this way, we can be better prepared to fight King George III again, even if he now calls himself King Barack I. This time, however, the King espouses the principles of all newborn Democrats—classic progressivism / socialism instead of a hereditary despotism. Add a comment
Are low information voters the problem or the solution to our country's malaise?– 50 ways to kill the Constitution!
Published on January 17, 2013
I wrote an article in November, 2012 for Conservative Action Alerts that I titled: "Dumass Americans have assured that all Americans will continue to suffer!" It was my crystal clear opinion at the time that Americans consciously chose to bring in a four year encore presentation from a bad actor that should have been booed off the stage the first time. Add a comment
My country 'tis of thee: time for Americans to pay attention. Part III of VII
Published on January 15, 2013 Print
Thinking men and women of today know what is happening.
It did not take long for these strong people, our earliest settlers, who chose a tough freedom rather than relative comfort living at home in captivity, to understand that even the colonies imposed some constraints on their movements. After their long struggle to get here, they realized they were still not totally free from the tyranny of their mother countries. The English government was well in control of most of the colonies during the time of the greatest US patriotism we have ever seen. Add a comment
My country 'tis of thee: time for Americans to pay attention. Part II of VII
Published on January 10, 2013
There is a quote on the Internet that keeps showing up as I read about the political realm in America: "Politicians are like diapers. They both need changing regularly and for the same reason." Since most agree this is true, does it mean that we are headed for a tyranny of the elite? Left unchecked, the elite will have it "their way," and the days of "your way," will be gone forever. The overarching theme of this essay is that we all must demand more from our supposed representatives and when they do not deliver, we must call them home. To do that effectively, we must pay attention and be prepared to act, and to act decisively when necessary. Add a comment
My country 'tis of thee: time for Americans to pay attention. Part I of VII
Published on January 8, 2013
I have been troubled very much during most of the Obama administration by otherwise good people, some in my inner circle of family and friends, who choose not to be good Americans. They do not even take the time to pay attention, yet they have an opinion on everything. It is a phenomenon that I simply do not understand. Add a comment