I saw this a few years ago, but someone recently sent it to me again. Unfortunately, it is way too true.

The Tax System – Explained With Beer

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 (FREE BEER!).
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.

We are facing difficult decisions at Bordeaux & Bordeaux, CPAs these days. Of big debate is what kind of toilet paper do we want to have in our office. I decided to let the public have a vote. Should we go with Charmin or the new 1040 IRS Tax Form TP?

The new 1040 Tax Form Toilet Paper is available via Amazon.com and PrankPlace.com

1040 Tax Form Toilet Paper

I was sadened to hear about the death of George Carlin this morning. He was always one of my favorite comedians and is certainly one of the greatest of all time. He always came up with witty sayings on about any topic. Feel free to add your favorites to the list.

Below are some good quotes from Carlin:

Always do whatever’s next.

Don’t sweat the petty things and don’t pet the sweaty things.

Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?

I recently went to a new doctor and noticed that he was located in something called the Professional Building. I felt better right away.

I went to a bookstore and asked the saleswoman, “Where’s the self-help section?” She said if she told me, it would defeat the purpose.

Most people work just hard enough not to get fired and get paid just enough money not to quit.