A constituent sent me on an email last week, which I thought I’d share with you. Its a humorous take on taxation.

 

TAX CODE EXPLAINED

 

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 1st – 4th pay nothing (poorest people)
The 5th would pay €1.
The 6th would pay €3.
The 7th would pay €7.
The 8th would pay €12.
The 9th would pay €18.
The 10th would pay €59. (the richest person ).

 

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 said “Since you are all such good customers, I’m going to reduce the cost of your daily beers 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 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 percentage, and he proceeded to work out the amounts each should pay. And so:

 

The 5th now paid nothing instead of €1 — (100% saving).

 

The 6th now paid €2 instead of €3 — (33% saving).

 

The 7th now paid €9 instead of €12 — (25% saving).
The 9th now paid €14 instead of €18 — (22% saving).
The 10th now paid €49 instead of €59 — (16% saving).

 

Each of the six was better off than before and the first four continued to drink for free but, once outside the bar, the men began to compare their savings.

 

The 6th man declared “I only got €1 out of the €20 but the 10th man got €10″.
The 5th man declared “I only saved €1 too. It’s unfair that he got TEN times more than me!”
The 7th man declared “Why should he get €10 back when I got only €2? The wealthy get all the breaks!”
The first 4 men yelled “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 very 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.

 

And so it came to pass…..!

The London Fraud Squad is looking for a man who has been trying to offload worthless bank shares and counterfeit Irish government bonds.  Sightings have been reported in the Midlands and the Dublin 2 area.