Government Spending Review: tax and benefits explained in beer

[gmb45]

Suppose that once a month, ten men go out for beer and the bill for all of them comes to ?100. If they paid their bill the way we pay our taxes and claim State benefits, 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 month 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 realised 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 a different system. The fifth man, like the first four, now paid nothing.
The sixth man paid ?2 instead of ?3 .
The seventh paid ?5 instead of ?7.
The eighth paid ?9 instead of ?12.
The ninth paid ?14 instead of ?18.
And the tenth man now paid ?49 instead of ?59. 
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 a ?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 rich 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!?
So, the nine men surrounded the tenth and beat him up. Funnily enough, the next month the tenth man didn?t show up for drinks, so the nine sat down and had their beers without him.
But when it came to pay for their drinks, they discovered something important ? they didn?t have enough money between all of them to pay for even half the bill.
That?s how our tax system works. The people who already pay the highest taxes do tend to get the most benefit from tax reliefs and reductions. Tax them too much, attack them for being wealthy and they just might not show up anymore.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible. Oh, and for those who have heard this one before, please don?t write to Max or me to say so. But do try to remember that it?s not always necessary to be solemn to make a serious point.
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Government Spending Review: tax and benefits explained in beer ? Telegraph Blogs

[alunfennell]

Suppose that once a month, ten men go out for beer and the bill for all of them comes to ?100. If they paid their bill the way we pay our taxes and claim State benefits, 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 month 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 realised 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 a different system. The fifth man, like the first four, now paid nothing.
The sixth man paid ?2 instead of ?3 .
The seventh paid ?5 instead of ?7.
The eighth paid ?9 instead of ?12.
The ninth paid ?14 instead of ?18.
And the tenth man now paid ?49 instead of ?59. 
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 a ?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 rich 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!?
So, the nine men surrounded the tenth and beat him up. Funnily enough, the next month the tenth man didn?t show up for drinks, so the nine sat down and had their beers without him.
But when it came to pay for their drinks, they discovered something important ? they didn?t have enough money between all of them to pay for even half the bill.
That?s how our tax system works. The people who already pay the highest taxes do tend to get the most benefit from tax reliefs and reductions. Tax them too much, attack them for being wealthy and they just might not show up anymore.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible. Oh, and for those who have heard this one before, please don?t write to Max or me to say so. But do try to remember that it?s not always necessary to be solemn to make a serious point.
------------------------------------------------------------------------
Government Spending Review: tax and benefits explained in beer ? Telegraph Blogs

That the same for Virtually Country across the Globe ! Capatilisim feed off the Working class to Keep City Banks and Bankers and the leaders of Industry Rich with a Good Boy slap on the Back from the Goverment in the form of tax concessions for Employing our Asses

If its Communism you want, where every person get paid virtually Same Salary and prices are set for every commodity then 60 years ago we fought for the wrong side

What is Happening is Capatilisim after 60 years , it has become oppressive and only serves the well to do in our society, one thing is for sure Capatilisim does not have another 60 years and will fail at some stage drastically as the corporate World sucks us dry but Gives nothing at all back, to many Black holes bleeding us dry stops Money circulating in our ecommies.

Leaving Tax payers to pick up the Tab for every other service while the corporate World which we feed counts only Profit from the tax concessions our Goverments give them.

[chroma]

What this is really all about is large companies getting into a panic because they know that if the government dont cut spending to Education, NHS, Police, Fire, Roads etc then theres going to be a tax hike.

And as has just been beautifully illustrated the guy at the bottom wont see any difference, the guys in the middle will get a hike of arround ?2 and the guys at the top will have to fork out an additional ?20

Whereas if theres a cut in spending the guys on the bottom get shafted out of an education for their kids, buildings burn down, rampant looting, and a hike on prescriptions whilst the guys at the top with their private security, schools and healthcare will feel no ill effects from having to pay less tax.

If anything government spending should increase and we should start paying off some of our global debt whilst the minority at the top get to shoulder the repercussions from decades of milking the population dry.

[gmb45]

in other words the rich will always get richer and the poor will always get poorer

[tshirtman]

THE CONSERVATIVE PARTY NEW ANTHEM

[ame=http://www.youtube.com/watch?v=hamKl-su8PE&feature=player_embedded]YouTube - Kaiser Chiefs - I Predict A Riot[/ame]

[Cronus]

Noticed how cold its been today!!!

I think this bloody Coalition government have put a 25% reduction on the sun as well...