Our Tax System Explained: Bar Stool Economics

Our Tax System Explained: Bar Stool Economics

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 got'

'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 half of the bill!

And that, ladies and gentlemen, 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

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

Welcome to Obama's America.

WHAT VOTERS NEED
TO KNOW

Written by Steve Baldwin

Executive Director of the Council for National Policy

Friday, 10
October 2008

(Click here for original article)

Here is what
American voters need to know.

The following
information has been completed on my own time and not on behalf of any
group or organization. It is based upon my own research and uses contacts I have in all branches of the US government, conversations with
think tank leaders, policy experts, election law attorneys, sources within the McCain campaign, and top political consultants.

Obama belonged to
a Socialist Party. New
Information has come out confirming that Obama was a member of a radical
socialist political party in Chicago called the 'New Party,' composed of former Black Panther members. Several documents have confirmed
Obama's membership as recently as 1996. Obama's supporters have attempted to 'scrub' websites clean of this information but fortunately,
researchers made copies of it before it disappeared. So far, the media is refusing to cover this story.

Obama continues
to hide his past. Obama has
continued to block reporters from gaining access to any and all medical, school, and even legislative records from his state senate days. The
media should be screaming about this but they are not. This makes Obama the least known presidential candidate in perhaps American
history. All of McCain's records have been made available.

The only thing we do know about Obama's time at Columbia University is that the title of his thesis was 'Soviet Nuclear Disarmament' but he will not release it..
I wonder why.

Michelle Obama
has written a racist thesis. Access to Michelle Obama's senior thesis at Princeton was also blocked until recent
effort by researchers to gain access to it. I can understand now why access was initially blocked.

In her thesis, Michelle identifies herself as a black separatist and is clearly hostile to the notion of blacks integrating into the larger society with all the
evil whites. This is Farrakhan type racism that could have easily been written by a Klansman from a white perspective.

Do you think if Cindy McCain had written a thesis about white separatism, it would be news?

Illegal foreign contributions are pouring into Obama's campaign at an unprecedented rate.
Analysis of Obama's disclosures reveal he has received around $32 million
dollars from overseas, much of it from the Middle East. There are 11,500 foreign donations. 520 of the donors list their country as 'IR' which is Iran. He received millions from
'Palestinians' and others hostile to US policy. Such contributions
are illegal and the Republican Party has asked the FEC to
investigate.

Even more alarming is that $190 million of his contributions are unidentified.
The donor is not listed. Many donors are clearly using fake names such as 'Good, Will.' The problem is that the FEC has no power to freeze
Obama's campaign or even stop him from continuing to receive foreign money.

All that will happen is that Obama will be fined AFTER the campaign is over. With 10% of
Obama's money coming from overseas, this means that for the first time in American history, foreigners will influence the outcome of a presidential
election.

Anti-American dictators are praising Obama. Just about every anti-American dictator in the world has issued words of praise for Obama: Cuban dictator, Fidel Castro, North Korean ruler, Kim Jong-il, Venezuelan strongman, Hugo Chavez, Libyan dictator, Moammar Qadhafi, and so forth.

Never before in American history have so many enemies of America praised a candidate for the presidency. Not only that, but an array of communist and socialist parties both here and abroad have praised him. Even terrorist groups such as the pro-Al Qaeda HAMAS and the Columbian terrorist group (and heroin producing) FARC have praised him.

And what did Obama promise in return? Such praise and endorsements do not come
casually. This means that people representing Obama must have met with these groups and leaders and have promised changes in US policy
favorable to them.

Obama's extremist friends go into hiding. The Obama
campaign is frantically covering up all Obama's socialist and Marxist connections by keeping his wacko friends away from the press. They just need to keep Americans in the dark for one more month! Moreover,
documents that show Obama's work with extremist groups are disappearing.
But I don't hear our crack reporters yelling 'censorship!'

Forced union dues used for Obama. The unions are gearing up for the largest campaign mobilization in US history. We now know that they have allocated over $100 million
dollars of forced union dues to a massive independent effort attacking McCain and supporting Obama. On election day, hundreds of thousands
of union workers will mysteriously call in sick and will work on getting the vote out for Obama.

Polls are showing some discouraging trends. They show
that people are blaming the fiscal crisis upon the Republicans, even
though Fannie Mae and Freddie Mac were created by Democrats and banks were
forced by Democrats to make high risk loans to low income people all in the name of 'equality' and 'compassion'.

Indeed, it was Obama's group, ACORN, who played a key role years ago in pressuring these
agencies to implement such policies. Three of the key architects of this policy are now involved with Obama's campaign. Moreover, McCain
is the one who authored sweeping legislation to reform all of this and it was blocked by the Democrats.

Americans don't know who controlled Congress the last two years. Polls also show
that most Americans do not know that the Democrats took power in late 2006 and thus had oversight over Fannie Mae and Freddie Mac; nor do they know that the Democrats shut down every inquiry into these rogue agencies and
ignored every sign of trouble.

Nor do Americans realize that right after the Democrats took control, the economy went
south. Except for the foreign policy arena which the Constitution explicitly grants power to the presidency, Bush has been a lame duck for
two years in all other policy areas.

Indeed, every economic indicator plunged downward AFTER the Democrats took control of Congress in 2006 - inflation, unemployment, job creation, etc, and yet, a
misinformed public is blaming Bush, and by extension, McCain for the
economy and sadly will be voting based upon ignorance of basic facts..

McCain is not Bush. Most
Americans also do not know that McCain fought Bush on Iraq strategy,
earmarks, spending, tax policy, education policy, homeland security issues, etc, etc, and that he is by far the most independent member of
Congress while Obama never crossed the aisle and was just an isolated far left senator.

It is now clear that we are paying a price for the vulgarization of American
culture. We have polls showing many Americans get their 'news' from Saturday Night Live, John Stewart, David Letterman, Jay Leno, and even from incoherent ramblings by such popular cultural figures as Alex Baldwin, Whoopi
Goldberg, and so on.

Americans engage in less serious reading and far more in entertaining themselves than any previous generation of Americans. This is truly sad and will cost our country in ways we can't even predict.

Obama has hordes of attorneys ready to challenge votes. We now know that the Obama campaign has around 10,000 lawyers volunteering to
work on election monitoring. As the Kerry campaign had four years ago, there will once again be an effort to decertify absentee ballots sent in abroad from military personnel, based on petty mistakes often made with such ballots.

Thousands of military personnel were disenfranchised four years ago and since they usually vote Republican, the Obama campaign will repeat this effort.

Obama is registering thousands of illegal aliens. While the Obama campaign works hard to disenfranchise the men and women fighting to protect us from terrorism, at the same time they're working feverishly to register illegal aliens, felons, and the homeless by the hundreds of thousands.

Video clips have already appeared on You Tube showing the Obama campaign registering illiterate homeless people. Most states do not ask for proof of citizenship to register to vote, so hundreds of thousands of illegal aliens will be voting for Obama.

The group that has specialized in registering illegal aliens for a decade is, in fact, Obama's former 'community service' group -- ACORN. While ACORN has been in legal trouble repeatedly for this work, the Obama campaign has
contracted them out do to 'voter registration.' Wink, wink..

Lots of felons will be voting. Not by coincidence, democrat governors and democrat legislators are granting
felons the right to vote. Just last week, the Virginian Democrat
governor gave thousands of felons the right to vote. Remember, crime pays! The Governor claims this action has nothing to do with the coming election. Right.

Democrats are already disqualifying ballots in Ohio. In Ohio, the Democrat Secretary of State is already disqualifying thousands of Republican absentee ballots, claiming they didn't check some obscure box
on the absentee forms. The GOP is filing suit here. But expect Republican ballots to be challenged all over the country by the legions of left wing trial attorneys who are volunteering their time to help steal the election just in case it's close.

Taxpayers groups are being ignored by the media. There are
four major taxpayer groups in Washington DC that monitor taxation and spending issues full time. All have now rated Obama as one of the worst senators on tax, spending and pork issues, while also rating McCain as one of the best senators on these issues. All have issued press releases but the media has purposely ignored this story.

Obama supports gay marriage. Recently, both Obama and Biden have made false statements about opposing gay
marriage. They know the vast majority of Americans oppose gay marriage, but in both private messages and private speeches, the Obama
campaign has informed the homosexual community that they favor repealing
DOMA.

DOMA is a federal
law that if repealed, means all states will have to recognize married homosexuals who move there from states which have already legalized
homosexual marriage - like Massachusetts and California. It's a back door way of legalizing gay marriage nationwide and it's why all the
radical gay groups have mobilized for Obama unlike any other candidate before.

With the exception of Fox News, none of the above mentioned developments is being covered by the major media in any meaningful way. All have been given this information. We all know, however, that if McCain took
millions of dollars from Middle Easterners, was praised by a half dozen foreign dictators, and hid all his medical and school records, there would
be huge stories on TV, radio and the newspapers for weeks on end.

The media is protecting this candidate to a degree never before seen in presidential
campaign history.

Predictions if Obama Becomes President

I have been asked for my predictions of what will happen if Obama were to win the presidency and take solid control of both houses. Put your seatbelt
on:

Jobs will leave America and job creation will decline. The
capitol markets are starved for cash due to the credit crisis. What is needed more than anything right now is tax cuts for corporations so they can survive the coming recession. This is the worst possible time to raise corporate taxes as Obama is proposing.

Our corporate tax hikes are already among the highest in the industrialized world and this
was killing us BEFORE the fiscal crisis. But Obama doesn't
understand how the economy works. He views corporations as a source of funding for his social programs. Period.

If he goes through with his corporate tax hike, look for corporations to 1) Outsource
jobs overseas 2) Move the entire corporate headquarters overseas, 3) Delay expansion plans, 4) Lay off workers.

Obama's proposal
for a government takeover of health care insurance will send the stock market plunging
in regards to health care plans, due to the instability such a proposalwould create. Obama's plan will drive private plans out of existence, eventually taking over the entire health care market. Also, as in
Canada and other nations with 'universal' health care, the good doctors leave the profession, creating a shortage, and waiting lists will be instituted for most procedures.

The doubling of capital gains taxes will bring job creation to a grinding halt.
There aren't many economists who argue with this point. But Obama doesn't seem to understand this. If this goes through, look also for the unemployment rate to rise.

There will be a flurry of lawsuits against private Christian schools, churches, etc. on
the gay issues, all due to the
legalization of gay marriage which creates a legal framework for a full frontal assault on American culture.

With the Obama administration using its power to promote homosexual marriage, gay
attorneys will work in tandem with Obama's justice department to chip away
at religious freedom, claiming gay rights now trump constitutional rights. Lawsuits will be aimed at forcing private Christian schools to admit gay teachers and to teach gay sex alongside heterosexual sex in
sex ed courses.

Similarly, churches that refuse to marry gay couples will be the subjects of lawsuits as well. Indeed, gay legal groups are already laying plans for the
final assault on what's left of America's Judeo-Christian culture.

Union power will
have a negative impact on the economy.
Obama has promised the unions he will remove the secret ballot which means
unions will be able to intimidate workers as they did in the 1950s.
This means more power, more money, and more demands on industry.
This also means more corporations moving offshore or filing for bankruptcy.

The cumulative impact of higher corporate taxes, higher capital gains taxes, and stronger
unions - on top of a severe fiscal crisis -- means America will likely have a recession lasting 3-4 years.

Criticism of Obama's agenda will be suppressed. Similarly
to the Clinton administration, Obama will use the power of the government to harass opponents with IRS audits. He will also suppress criticism
of his agenda by passing the 'Fairness Doctrine' which will cause radio stations to remove talk shows. The talk show industry is already
preparing for the assault. This is not a joke.

Illegal alien rights will be federalized. Obama has
spent much of his career fighting for the 'rights' of illegal
aliens. There is little doubt he will use his Justice Department to fight for these 'rights' which in turn will attract millions of additional
illegal aliens. What little gains made in the last few years in
fighting for a more secure border will be lost.

The reemergence of bogus race-based rights. Obama
believes in wild racial conspiracy theories such as quotas for police arrests and pull overs, reparations for blacks based on the notion all
whites are guilty of perpetrating slavery in the past, and that lending agencies based their lending policies on race instead of credit risk.

Indeed, it was the last issue used by Obama's group, ACORN, to fight for high risk
lending policies which caused the mortgage crisis we have today.

This worldview will mean that Obama's Justice Department to spend its resources on
charging businessmen with racism for not hiring enough minorities, spending millions on federal studies 'proving' racism in law enforcement, and going after universities for not implementing race-based admission plans.

Internal Security will be weakened resulting in America becoming more vulnerable to
terrorism. Obama has been
critical of our internal security apparatus, including the program that monitors the phone calls of foreign terrorists and other elements of the
Patriot Act. What most Americans don't know is that Bush's aggressiveness on internal security prevented dozens of terrorist plots,
many of which the public never knew about.

Obama's close ties to ACLU type attorneys make it likely that he will weaken internal
security measures such as the Patriot Act. This will send an 'open season' message to Islamic terrorists.

Just this week, a court has ruled that we must release terrorist prisoners from Guantanamo and grant them all the rights US citizens have. Obama supported this decision. Then we have Obama declaring in his own book (Audacity of
Hope), 'I will stand with the Muslims should the political winds shift in an ugly direction.'

Gas prices will rise. Obama's
hostility to drilling and nuclear power means he will rely totally on 'alternative' forms of energy to meet our energy needs but there isn't an energy expert alive who will claim this will enable us to meet our energy
needs anytime in the next few decades. Coupled with Obama's proposal
to increase taxes on an already over-taxed oil industry - which will be passed on to consumers - you can expect to pay steep prices for gas for many years to come.

Welcome to Obama's America.

Steve Baldwin is Executive Director of the Council for National Policy.