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The Tax System Explained - Using a Beer Analogy

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Old 16-04-2018, 11:35 PM   #1
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The Tax System Explained - Using a Beer Analogy

Before you read this WOT CSB...please remember to file your tax hor!!!

IRAS is no give chance one

Suppose that once a week, 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.
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 week 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 realized 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 that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving). 
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!" 
"Yeah, 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 wealthy 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!" The nine men surrounded the tenth and beat him up. 

The next week the tenth man didn't show up for drinks, so the nine sat down and had their 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 to pay for even half of the bill! 
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Old 16-04-2018, 11:58 PM   #2
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Interesting story, thanks for sharing
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Old 16-04-2018, 11:59 PM   #3
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All the more we should embrace the FT with love, they are paying for our beers!
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Old 17-04-2018, 12:04 AM   #4
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So the morale of the story is?

The tax system is flawed?
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Old 17-04-2018, 12:06 AM   #5
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the percentage of tax paid is different
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Old 17-04-2018, 12:07 AM   #6
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Until you realise and start wondering where the amassed fortunes came from. 100% sweat and hard work from the entire lot of them?
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Old 17-04-2018, 12:08 AM   #7
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Until you realise and start wondering where the amassed fortunes came from. 100% sweat and hard work from the entire lot of them?
Wealth mostly got from opening businesses and dividends since there is no capital gain tax and dividend tax in singapore
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Old 17-04-2018, 12:11 AM   #8
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Wealth mostly got from opening businesses and dividends since there is no capital gain tax and dividend tax in singapore
I hire you, I pay you shiat salary, now you pay less tax, ain't that chummy?

or


You don't like to work for me, you start business yourself, I lean on my contacts and connections to make life difficult for you.


Moral of the story is, heng I don't drink beer.
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Old 17-04-2018, 12:17 AM   #9
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never include gst as % income
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Old 17-04-2018, 12:17 AM   #10
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to people who have problems understanding, taxes = rich people subsidising the poor.
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Old 17-04-2018, 12:20 AM   #11
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Cool story brudder
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Old 17-04-2018, 12:25 AM   #12
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to people who have problems understanding, taxes = rich people subsidising the poor.
WRONG!!! What makes PAP salaries affordable? Answer: GST hike. GST tax is like opposite of minimum salary, its a minimum tax cuz everyone pays it as long as you are living, even if you are a baby or retired
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Old 17-04-2018, 12:33 AM   #13
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WRONG!!! What makes PAP salaries affordable? Answer: GST hike. GST tax is like opposite of minimum salary, its a minimum tax cuz everyone pays it as long as you are living, even if you are a baby or retired
aiya.... always some fool must bring in political things....
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Old 17-04-2018, 12:35 AM   #14
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interesting~
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Old 17-04-2018, 12:59 AM   #15
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Something wrong with the story

Must state that need 10 person before the pub starts to serve them beer

Without ten person. The 10th richest can’t enjoy any beer at all

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