How Taxes Work

Bar Stool Economics, something to which we ALL can relate!

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. They could all just pay $10 since they all drank beer or if they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest of the 10) 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 OK with the arrangement until one day, the owner threw them a curve. 'Since you are all such good and faithful customers,' he said, 'I'm going to reduce the cost of your daily beer bill 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 realised if they divided the $20 savings by six they could each reduce the amount they were paying by $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 the same way Tax Savings are dispersed, 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)
- so 5 men are drinking for free. The sixth now paid only $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 (the wealthiest) 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, now along with the 5th too. But once outside the restaurant, the men began to compare their total dollar 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. '$20 was given back and we didn't get anything at all. This 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, 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.

(received by email)

DRAFT POST Applications for broadband funding open

Applications for broadband funding open

Applications for the $340 million Broadband Investment Fund (BIF) are now open.

The BIF contains $325 million operating and $15 million capital funding available over a maximum of five years and is a key part of the government’s Digital Strategy 2.0 package.

The Fund is targeting high-speed open access urban fibre networks, better rural connectivity and improved international links. AND IS ABSOLUTELY NOT TARGETING PIGS LOOKING FOR A THROUGH.

It will be used to accelerate broadband investment in two particular areas:
• facilitating high-speed broadband to businesses and entities such as municipalities, universities, schools and hospitals in urban centres WHERE THERE IS PROBABLY A PERFECTLY ADEQUATE BUSINESS PLAN WITHOUT THROWING MY FUCKING TAXES AT IT;
• extending the reach of broadband into underserved regions, particularly in the rural sector.
Community groups are encouraged to work with suppliers and local government to signal their interest in being involved in using broadband to improve productivity and New Zealand’s connectivity to the rest of the world.

Applications for the BIF close on 30 September 2008.

More details and application packages can be found at www.digitalstrategy.govt.nz. The helpdesk number for inquiries about submitting an application is 0508 276232 (0508 BROADBAND).

Me for President!

Now just wait a snottin' pickin' minute: there's a new boy on the block want's yer vote.
Are you fixin'on voting for them Donks or Republicans? Vote for me: James Gordon Brown of the Publican's Party. Donations to a/c 01-0111-01111111-00 or by post to: 1177 Willis Street, Wellington. This message authorised by me, 5 Carmicael Road, Coral Harbour, The Bahamas.





Yeah, I know: Adolf did it first. And now Not Peter Cresswell, too.

Dumb Ideas

#1 - Phil Goof decides to pick on the army in an election year.
Should you have not just expressed some disappointed with what's happened, that leasons have been learned, let's now move on?

#2 - Cadbury to feed us the brown plastic that Australian's call chocolate:
a) melt in the mouth: r
b) taste like petrol: a

#3 - Have a Police psyche that seems to spoil for a fight over the Undie 500. They really ARE the Fun Police. What is this country coming to?

The ComCom is desirable cos...?

AUCKLAND AIRPORT DROPS DUTY FREE PLAN
Auckland Airport has backed off plans to cut the number of duty free retailers from two to one, buckling to pressure from the Commerce Commission.
The commission's view was that shoppers would have ended up paying higher prices for duty free goods.

So only one Duty Free is no good in the commission's eyes? Are they regularly patrolling the airport to ensure there are 2 shoe repair kiosks? Two ice cream parlours? Two newsagents? Two passport photo booths?



ComCom's Paul(a) Rebstock

You Are Fucking Kidding

Al Bore buys a boat

http://pajamasmedia.com/blog/gore-hits-the-waves-with-a-massive-new-houseboat/



http://michellemalkin.com/2008/08/06/name-al-gores-hugetastic-boat/#comments



Hat tip Tom Nelson http://tomnelson.blogspot.com/

Life on Mars

Reserve Bank Email Service

NEWS RELEASE

Date 30 July 2008

Time EMBARGOED TO 4:00PM

Inflation targeting serves NZ well

New Zealand's inflation-targeting framework continues to serve theeconomy well, but we should be careful not to ask too much of it,Reserve Bank Governor Alan Bollard said today.

In a speech titled "Flexibility and the Limits to Inflation Targeting",Dr Bollard said inflation targeting is the best approach New Zealand andmany other similar countries have yet found for monetary policy, among alimited number of viable alternatives.

"Of course, we continue to seek improvements. But overall, and even inthe current very difficult circumstances, the flexible inflationtargeting framework positions us well to manage the ongoing shocksimpacting the New Zealand economy."

Prima facie evidence that the man lives on another planet than most New Zealanders: inflation is 4% and predicted to reach 4.8% in qtr 4.