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Bar Stool Economics - 10/12/2008 5:35:10 PM
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rgsoundguy
Posts: 396
Joined: 4/12/2005
From: Pottstown, PA
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This was emailed to me. I thought it was a fun and informative read. Enjoy!
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.
_____________________________
Albert Einstein said that insanity is doing the same thing over and over again and expecting different results. That convinces me that our nation is insane because we continually elect republicans and democrats expecting change and get none.
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RE: Bar Stool Economics - 10/12/2008 8:56:10 PM
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csl7037
Posts: 2050
Joined: 3/24/2008
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That's very clever. I like that.
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RE: Bar Stool Economics - 10/12/2008 9:06:50 PM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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The problem with this story is that it assumes that everyone is drinking the same amount of beer. If the richest man is drinking $65 worth of beer, then by him paying $59, he is paying too little. The rich benefit much from government. For example, the government protects property rights and enforces contracts through the court system. This is more valuable to Bill Gates than it is to me, because he has more property to protect.
Also, the tax cut analogy is flawed. The price of beer never goes down, the government just puts the unpaid for beer on its credit card. That will have to be repaid later, with interest. So the poor people might be richer in the future, will have to pay for all the beer the wealthier people drank, plus interest. In this case, they would be right to be upset and the so called tax cut. Actually, it would more accurately be called a deferred tax increase.
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RE: Bar Stool Economics - 10/13/2008 12:12:34 AM
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Zhi
Posts: 1499
Joined: 7/31/2007
Status: online
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Given that the "beer" represents governmental benefits, we all drive on the same roads, get our mail through the same post office, etc. If anything, the poorest guy gets the best/most beer, because he gets welfare on top of all the "normal" stuff.
What kind of house the rich guy goes home to after having his beer is entirely inconsequential.
_____________________________
The optimist says the glass is half full. The pessimist says the glass is half empty. The engineer says the glass is twice as large as it needs to be.
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RE: Bar Stool Economics - 10/13/2008 7:29:16 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: Zhi
Given that the "beer" represents governmental benefits, we all drive on the same roads, get our mail through the same post office, etc. If anything, the poorest guy gets the best/most beer, because he gets welfare on top of all the "normal" stuff.
What kind of house the rich guy goes home to after having his beer is entirely inconsequential.
To some extent we all receive the same benefits, but we don't all value them equally. That is why I said, the rich person benefits more from government, because one function of government is to protect property rights. This is much more valuable to Bill Gates than to me, because he has more property to protect. Also, some people benefit more from government than others. For example, the government gives special treatment to sugar growers by protecting them from foreign competition. This is worth millions to them, many of whom are wealthy already. This is a benefit some people get at the expense of others. We all have to pay higher sugar prices for this benefit to a few rich sugar growers. So it is not even close to being true to say that we all receive the same value of benefits from the government.
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RE: Bar Stool Economics - 10/13/2008 8:00:11 AM
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rgsoundguy
Posts: 396
Joined: 4/12/2005
From: Pottstown, PA
Status: offline
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quote:
ORIGINAL: martyfran
quote:
ORIGINAL: Zhi
Given that the "beer" represents governmental benefits, we all drive on the same roads, get our mail through the same post office, etc. If anything, the poorest guy gets the best/most beer, because he gets welfare on top of all the "normal" stuff.
What kind of house the rich guy goes home to after having his beer is entirely inconsequential.
To some extent we all receive the same benefits, but we don't all value them equally. That is why I said, the rich person benefits more from government, because one function of government is to protect property rights. This is much more valuable to Bill Gates than to me, because he has more property to protect. Also, some people benefit more from government than others. For example, the government gives special treatment to sugar growers by protecting them from foreign competition. This is worth millions to them, many of whom are wealthy already. This is a benefit some people get at the expense of others. We all have to pay higher sugar prices for this benefit to a few rich sugar growers. So it is not even close to being true to say that we all receive the same value of benefits from the government.
Actually, with the abuses of eminent domain, I would say the government attacks property rights. A municipality would love to get its hands on Gates' estate and subdivide it and collect even more revenue from property taxes. And there is another issue, people with larger properties are paying more in property taxes anyway, so sorry, not buying the property rights argument.
_____________________________
Albert Einstein said that insanity is doing the same thing over and over again and expecting different results. That convinces me that our nation is insane because we continually elect republicans and democrats expecting change and get none.
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RE: Bar Stool Economics - 10/13/2008 8:07:49 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: rgsoundguy
Actually, with the abuses of eminent domain, I would say the government attacks property rights. A municipality would love to get its hands on Gates' estate and subdivide it and collect even more revenue from property taxes. And there is another issue, people with larger properties are paying more in property taxes anyway, so sorry, not buying the property rights argument.
If the government attacked property rights, Bill Gates would have very little property in the US. In addition, I am not limiting myself to real property, but all property. If you think protecting property rights is not valuable, then I would suggest you look at Somalia. Property rights are not protected there, and Bill Gates would not be a billionaire there either.
As to the Property taxes, that is a local government issue and is related to real property, not all property.
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RE: Bar Stool Economics - 10/13/2008 8:59:34 AM
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rgsoundguy
Posts: 396
Joined: 4/12/2005
From: Pottstown, PA
Status: offline
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quote:
ORIGINAL: martyfran
quote:
ORIGINAL: rgsoundguy
Actually, with the abuses of eminent domain, I would say the government attacks property rights. A municipality would love to get its hands on Gates' estate and subdivide it and collect even more revenue from property taxes. And there is another issue, people with larger properties are paying more in property taxes anyway, so sorry, not buying the property rights argument.
If the government attacked property rights, Bill Gates would have very little property in the US. In addition, I am not limiting myself to real property, but all property. If you think protecting property rights is not valuable, then I would suggest you look at Somalia. Property rights are not protected there, and Bill Gates would not be a billionaire there either.
As to the Property taxes, that is a local government issue and is related to real property, not all property.
Don't put words in my mouth. I didn't say protecting property rights wasn't valuable. What I said was that the federal government does not seem to be doing a good job of it, so if that is your defense of the wealthy paying a higher percentage of income tax, then you have a weak case.
_____________________________
Albert Einstein said that insanity is doing the same thing over and over again and expecting different results. That convinces me that our nation is insane because we continually elect republicans and democrats expecting change and get none.
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RE: Bar Stool Economics - 10/13/2008 9:51:32 AM
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Strider33
Posts: 183
Joined: 4/24/2008
Status: offline
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quote:
ORIGINAL: rgsoundguy
This was emailed to me. I thought it was a fun and informative read. Enjoy!
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.
The story is indeed fun and informative. But it doesn't tell the whole truth.
The truth is that most of us pay more in FICA and Medicare taxes than we do in Federal Income tax. And, if we are employees, only half of the cost of these payroll taxes is visible in our pay stubs. The other half is "paid by the employer" exclusive of gross pay.
The employee ends up paying that cost anyway, in the form of lower wages and increased chance of layoffs. But the fiction that the employers pays half of the tax helps hide the true cost.
Medicare taxes are flat. FICA taxes are more regressive than a flat tax. They go up to a cap, and stop.
That is part of why Warren Buffet is able to say that his cleaning lady pays a higher percentage of overall tax on income than he does.
_____________________________
Not all those who wander are lost.
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RE: Bar Stool Economics - 10/13/2008 10:36:50 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: rgsoundguy
Don't put words in my mouth. I didn't say protecting property rights wasn't valuable. What I said was that the federal government does not seem to be doing a good job of it, so if that is your defense of the wealthy paying a higher percentage of income tax, then you have a weak case.
The federal government is doing a pretty good job of doing in the case of Bill Gates and Warren Buffett. After all, they have the ability to move all of their assets to Bermuda and save a bundle in taxes. They don't do that, so that means that they must be getting a good deal by staying here.
Are you really going to tell me that Bill Gates and I get the same benefits from government?
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RE: Bar Stool Economics - 10/13/2008 11:04:40 AM
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_jjp_
Posts: 624
Joined: 10/25/2007
Status: offline
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quote:
ORIGINAL: martyfran
The federal government is doing a pretty good job of doing in the case of Bill Gates and Warren Buffett. After all, they have the ability to move all of their assets to Bermuda and save a bundle in taxes. They don't do that, so that means that they must be getting a good deal by staying here.
That doesn't mean that they get more than anyone else in America, it only means that they get more here than they would in another counrty.
quote:
Are you really going to tell me that Bill Gates and I get the same benefits from government?
What exactly does Bill Gates get that I don't?
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RE: Bar Stool Economics - 10/13/2008 11:12:39 AM
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Random
Posts: 974
Joined: 4/18/2005
From: Zipperhead
Status: offline
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quote:
ORIGINAL: Strider33
The story is indeed fun and informative. But it doesn't tell the whole truth.
The truth is that most of us pay more in FICA and Medicare taxes than we do in Federal Income tax. And, if we are employees, only half of the cost of these payroll taxes is visible in our pay stubs. The other half is "paid by the employer" exclusive of gross pay.
On the other hand, many people at that income level get the earned income tax credit, which more than covers their payroll taxes. So, they are effectively paying a negative total tax.
The original post is thus wrong, the guys at the low end ARE being paid to drink beer.
_____________________________
"That which has always been accepted by everyone, everywhere, is almost certain to be false." -- Valery
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RE: Bar Stool Economics - 10/13/2008 11:13:25 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: _jjp_
What exactly does Bill Gates get that I don't?
How much is it worth to Bill Gates that the US protects property rights? Millions.
How much is it worth to you that the US protects property rights? Probably somewhere in the thousands.
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RE: Bar Stool Economics - 10/13/2008 11:20:37 AM
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_jjp_
Posts: 624
Joined: 10/25/2007
Status: offline
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quote:
ORIGINAL: martyfran
quote:
ORIGINAL: _jjp_
What exactly does Bill Gates get that I don't?
How much is it worth to Bill Gates that the US protects property rights? Millions.
How much is it worth to you that the US protects property rights? Probably somewhere in the thousands.
But both of us have our property protected don't we? So i am, in fact, getting exactly what Gates gets. What does property rights have to do with how much a person should pay in taxes anyway? What service that taxes provide for does Bill Gates get more out of than I do?
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RE: Bar Stool Economics - 10/13/2008 11:25:13 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: _jjp_
But both of us have our property protected don't we? So i am, in fact, getting exactly what Gates gets. What does property rights have to do with how much a person should pay in taxes anyway? What service that taxes provide for does Bill Gates get more out of than I do?
Let me ask you a question: Do you pay the same homeowners insurance that Bill Gates does? Probably not. Why does he pay more, and is it unfair? the reasoning is simple, Bill has a 40,000 square foot house and so he pays more for insurance because he has more house to protect. Nobody considers this unfair. Now the government does the same thing with property in general. Who benefits more from this? Are you saying that you value the protection in property rights at exactly the same amount as Bill Gates?
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RE: Bar Stool Economics - 10/13/2008 11:43:29 AM
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_jjp_
Posts: 624
Joined: 10/25/2007
Status: offline
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quote:
ORIGINAL: martyfran
quote:
ORIGINAL: _jjp_
But both of us have our property protected don't we? So i am, in fact, getting exactly what Gates gets. What does property rights have to do with how much a person should pay in taxes anyway? What service that taxes provide for does Bill Gates get more out of than I do?
Let me ask you a question: Do you pay the same homeowners insurance that Bill Gates does? Probably not. Why does he pay more, and is it unfair? the reasoning is simple, Bill has a 40,000 square foot house and so he pays more for insurance because he has more house to protect. Nobody considers this unfair. Now the government does the same thing with property in general. Who benefits more from this? Are you saying that you value the protection in property rights at exactly the same amount as Bill Gates?
OK one more time. What tax paid service does Bill Gates gain more from than I? I benefit equally from property rights as Bill does, I just happen to own less currently. I have no problem with Bill Gates paying more, I do have a problem with people expecting him to pay a larger percentage though. While we are on the subject, who produces more for the nation, me or Bill Gates? Bill Gates provides thousands of jobs directly and many more through his suppliers. I am not currently in a position to provide jobs for anyone.
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RE: Bar Stool Economics - 10/13/2008 11:56:56 AM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: _jjp_
OK one more time. What tax paid service does Bill Gates gain more from than I? I benefit equally from property rights as Bill does, I just happen to own less currently.
Who gains for from the following international agreement, negotiated by the US among others, you or Bill Gates? In other words, who has more to lose if the agreement is not adhered to?
Intellectual Property rights agreement
Are you saying that you receive the same monetary benefit from this agreement that Bill Gates does?
quote:
I have no problem with Bill Gates paying more, I do have a problem with people expecting him to pay a larger percentage though.
If there is a $100 bar bill, by bill paying more, he is by necessity paying a larger percentage.
quote:
While we are on the subject, who produces more for the nation, me or Bill Gates? Bill Gates provides thousands of jobs directly and many more through his suppliers. I am not currently in a position to provide jobs for anyone.
No doubt, Bill Gate's provides jobs and we should not tax them out of existence. But, the article posted was not about the efficiency of the tax law, it was about fairness. I think it is fair to ask people to pay in proportion to the benefit they receive.
Is is unfair that Bill Gates pays more in house insurance? If not, why not.
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RE: Bar Stool Economics - 10/13/2008 11:59:16 AM
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Zhi
Posts: 1499
Joined: 7/31/2007
Status: online
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quote:
To some extent we all receive the same benefits, but we don't all value them equally. That is why I said, the rich person benefits more from government, because one function of government is to protect property rights. This is much more valuable to Bill Gates than to me, because he has more property to protect. Also, some people benefit more from government than others. For example, the government gives special treatment to sugar growers by protecting them from foreign competition. This is worth millions to them, many of whom are wealthy already. This is a benefit some people get at the expense of others. We all have to pay higher sugar prices for this benefit to a few rich sugar growers. So it is not even close to being true to say that we all receive the same value of benefits from the government.
You seriously think that Bill Gates doesn't pay for his own personal small army in terms of security?
If the government didn't protect property rights, it's us middle class folks who would have our property taken by the armies of rich feudal lord types. Not people like Bill Gates, who could easily hire enough mercenaries to take over his own personal third world country were he so inclined. The fact that he doesn't have to do so is not a big deal to him. The fact that *I* don't have to hire mercenaries to protect my property is worth a lot to me... because I don't make enough to even hire a bodyguard, much less a security team, which I assure you Bill already has.
_____________________________
The optimist says the glass is half full. The pessimist says the glass is half empty. The engineer says the glass is twice as large as it needs to be.
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RE: Bar Stool Economics - 10/13/2008 12:05:09 PM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: Zhi
You seriously think that Bill Gates doesn't pay for his own personal small army in terms of security?
You are confusing tangible property with intangible property. Without our legal system, how is he going to protect his patents and copyrights? Are you saying that his intellectual property rights don't need to be protected by the government?
As far as protecting his physical property, I guarantee you that he spends less in the US where property rights are protected, than he would in Somalia, where they are not.
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RE: Bar Stool Economics - 10/13/2008 12:20:59 PM
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Zhi
Posts: 1499
Joined: 7/31/2007
Status: online
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quote:
You are confusing tangible property with intangible property. Without our legal system, how is he going to protect his patents and copyrights? Are you saying that his intellectual property rights don't need to be protected by the government?
Protecting software is frankly not all that hard even without intellectual property rights protections. It's kind of the nature of the beast. I would note that most of Bill's advancements have been basically duplicated by other operating systems, some of which are even free (the various Linux desktops, OpenOffice). Yet, he still maintains supremacy... primarily because he moves faster and has brand loyalty working for him.
Case in point: Bill Gates solidified the PC grasp on the game market not by creating ironclad intellectual property fences, but by *giving away* the DirectX SDK to encourage amateur developers (the game programmers of the future) to learn his stuff inside and out, so that game development houses would be getting the best employees who had been thoroughly trained in a platform that belongs to Windows, not anything else. He even gave away free copies of his development software suite to do this, though it lacks some of the capabilities of the full suite (which is pretty expensive). So, most hot new coders are well-versed in his stuff, and game companies are more than happy to just download the free stuff themselves and not retrain their coders. Thus, Windows cornered the gamer market.
But, in general, intellectual property laws are primarily in place to protect the massive investment required for R&D. Thus, we all prosper because companies know that if they spend millions and millions coming up with a new pill that, say, cures cancer, they will get a return on that investment. If they didn't, we would still be in the days of snake oil and the occasional aspirin, because nobody would be willing to pay for the research.
quote:
As far as protecting his physical property, I guarantee you that he spends less in the US where property rights are protected, than he would in Somalia, where they are not.
As do we all. So, point being?
It's not the fact that he spends less, it's value added. In Somalia, he could afford a personal army. You or I could not. Therefore we get more net value from our government protection resulting in us not needing a personal army to protect us, as we could not afford it. It would cost, say, maybe 1% of Bill Gates' income to be safe in Somalia... it would probably cost at least 50% of my income. So, I get more benefit out of not needing it because my government protects me.
_____________________________
The optimist says the glass is half full. The pessimist says the glass is half empty. The engineer says the glass is twice as large as it needs to be.
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RE: Bar Stool Economics - 10/13/2008 12:22:56 PM
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_jjp_
Posts: 624
Joined: 10/25/2007
Status: offline
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quote:
Who gains for from the following international agreement, negotiated by the US among others, you or Bill Gates? In other words, who has more to lose if the agreement is not adhered to?
Intellectual Property rights agreement
Are you saying that you receive the same monetary benefit from this agreement that Bill Gates does?
More working class people benefit from this than does Bill. Without such laws companies would be hard pressed to make a profit on their inventions and as such many thousands could be jobless.
quote:
ORIGINAL: martyfran
No doubt, Bill Gate's provides jobs and we should not tax them out of existence. But, the article posted was not about the efficiency of the tax law, it was about fairness. I think it is fair to ask people to pay in proportion to the benefit they receive.
then you need to account for the benefits they provide in that calculation. Bill Gates produces jobs, that should be a factor taken into account if it is truly about being "fair".
quote:
Is is unfair that Bill Gates pays more in house insurance? If not, why not.
Not even a good analogy but thanks.
I will ask again what tax funded programs benefit Bill Gates more than me?
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RE: Bar Stool Economics - 10/13/2008 1:48:15 PM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: _jjp_
More working class people benefit from this than does Bill. Without such laws companies would be hard pressed to make a profit on their inventions and as such many thousands could be jobless.
When Microsoft makes a profit, who gets more of that profit, Bill Gates or you and me? So this treaty helps microsoft earn more profits, Bill Gates gets a big share of those profits that this law helps protect, yet you claim that I benefit more from this government intervention than he does?
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RE: Bar Stool Economics - 10/13/2008 1:55:41 PM
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Zhi
Posts: 1499
Joined: 7/31/2007
Status: online
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quote:
When Microsoft makes a profit, who gets more of that profit, Bill Gates or you and me? So this treaty helps microsoft earn more profits, Bill Gates gets a big share of those profits that this law helps protect, yet you claim that I benefit more from this government intervention than he does?
Welcome to capitalism?
You do something profitable, you get profits. Yay profits! Now, you get taxed more as well, so you have to determine whether the profits are worth it (or whether they'd be more worth it if you were suddenly a citizen of, say, Bermuda) but the entire basis of our economy, and the reason any of us make money, is the idea that work, whether it be in terms of ideas created or actual physical labor, is worth something.
Government intervention protects both you and Bill Gates pretty much equally, by saying that whatever profits you make (after taxes) are yours, and protecting you from being robbed of those profits. How much profit you yourself manage to generate is your problem, not the government's. You're making less than Bill Gates because frankly, you're not as good at ideas and marketing and business and taking risks as he is. Neither am I. *shrug*
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The optimist says the glass is half full. The pessimist says the glass is half empty. The engineer says the glass is twice as large as it needs to be.
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RE: Bar Stool Economics - 10/13/2008 3:59:13 PM
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martyfran
Posts: 598
Joined: 7/17/2005
Status: online
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quote:
ORIGINAL: Zhi
You do something profitable, you get profits. Yay profits! Now, you get taxed more as well, so you have to determine whether the profits are worth it (or whether they'd be more worth it if you were suddenly a citizen of, say, Bermuda) but the entire basis of our economy, and the reason any of us make money, is the idea that work, whether it be in terms of ideas created or actual physical labor, is worth something.
For some reason, however, profits are higher here than they are in Somalia. Does it have something to do with the legal framework which our government provides which protects property rights? Do we all get the same benefit from this, no. Just like we all get the same potential benefit for our state run university systems. We all have the option of going there. If you choose to benefit from the university, you have to pay. Same way, if Bill Gates chooses to stay in the US and operate and benefit from our legal system, it is not unreasonable to ask him to pay in proportion to his benefit.
quote:
Government intervention protects both you and Bill Gates pretty much equally, by saying that whatever profits you make (after taxes) are yours, and protecting you from being robbed of those profits.
Those who have more property get more protection from the government protecting our property rights. I get more benefit today than I did when I was a poor graduate student. So it is not unreasonable to expect me to pay more than I did then.
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