View Full Version : A Lesson in Liberal Finance

10-12-2010, 12:15 PM
This just cracked me up.

October 12, 2010
D.L. Hammack

Last week I had the opportunity to speak with a small businessman who devised a simple lesson in the liberal thought process as it relates to redistribution of wealth.

This entrepreneur has a very small company and hires seasonal help as his work load increases. During the summer, he hired an energetic 21-year old. This lad was a good worker and always showed up on time. One morning the worker had to meet his employer at the job site, so he drove his own car. There, on the back bumper was an Obama/Biden bumper sticker from the 2008 election.

Later that afternoon, the conversation turned to politics and the boss asked his temporary employee why he supported Obama.

"I just think that there are too many people with too much money" he said. He went on to detail how the Obama mantra of redistribution was good for poor people. The boss then asked him "Who gets to decide when you've made enough money and where that money should go?" The employee responded with a shrug and said "the government." After two hours of back and forth, the boss gave up trying to educate the employee and opted for another form of teaching.

The Friday of that same week, the boss handed his employee a paycheck. Anxious to see and spend his first paycheck, the employee opened the envelope. His smile quickly turned to a saddened frown. He quietly walked over to the boss. "Sir, I thought that you said I would be making $10 an hour, right?"

"Yup" came the reply. "You're getting $10 per hour."

"But I worked 30 hours this week and my paycheck isn't anywhere near $300"

"Yup, you did work 30 hours. Your gross would've been $300, but I figured that you live at home with your parents, so you don't need rent money. Your mom has a garden, so you don't need food money. When you're working, we drive in the work van, so you don't need any gas money. You got me to thinking this week about the Obama plan to redistribute wealth. I thought I would put it to work here in my little business. I took your advice and took some of those earnings that you don't need. I'm going to find a family whose dad has decided that he doesn't want to work and he needs money for cigarettes. Basically, I'll find someone who needs it more than you do."

The employee stood there shell-shocked for a full minute. The boss gently grabbed the paycheck from the employee and tore it up. "Here's your real check" he said as he extended his hand with another envelope. "You might want to rethink this whole idea of taking money from working people and giving it to others. Whether it's taken out in taxes or taken directly from you, the bottom line is that it is taken from you. Whether it's taken by the government or taken by force at the end of a gun barrel...should they not both be considered theft?"

Why is it that they don't teach this in school?

10-12-2010, 01:29 PM
I always wanted to go into a school and ask if the students believe that wealth should be spread around. If the majority said yes, I would take the ones who said yes and ask them to put whatever money they had in their pockets and put it on their desks. I would then gather up all the money and distribute it among the entire class, then ask those who got less money than they originally had, how they felt. Also, I find this exercise very good as well. Our tax system explained in beer:

Our Tax System Explained in Beer!
By: David R. Kamerschen, Ph.D. Professor of Economics University of Georgia

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.

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.http://hvac-talk.com/vbb/showthread.php?t=182357