Thought experiment... wealth distribution...

There's a thing doing the rounds about 10 men going to the pub and dividing the tab according to how the tax system works.  It's designed to make you feel sorry for the richest people with how they are being sponged off by the poorest.  The thing is, I was curious and decided to re-run the analogy but this time look at it from the point of view of how much money they had when they walked into the pub, if the money they had was distributed around their wallets the same was that it is in the general economy.

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 ball.

"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 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 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 a higher percentage the poorer he was, 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 (100% saving).

The sixth now paid £2 instead of £3 (33% saving).

The seventh now paid £5 instead of £7 (28% saving).

The eighth now paid £9 instead of £12 (25% saving).

The ninth now paid £14 instead of £18 (22% saving).

The tenth 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.

"I only got a pound 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 pound 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 got only £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 night 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 for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally 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.

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible

So,let's flip that around then and look instead of at the taxes, at how much of the total money the blokes have if the money is distributed around them the way wealth is in the country.... the stats I found are 2007 and apparently it's worse now.

So 10 men walk into a pub with the money split around the way that wealth is distributed in the economy.

The richest bloke has 73 quid on him...

The next two have about 10 quid each...

blokes 7 and 6 have a fiver...

the next two have about about a pound each.... The remaining 3 have 20p between them.

What interests me is that if we look back at the piss poor analogy up there... the richest bloke still has enough for a taxi home in his wallet... Nobody else can actually afford the bloody round...

So what it's telling us, is that on the whole, the middle percentiles are the ones being butt fucked and the guy on top, assuming he wants to have people to drink with, has to pick up the tab because the rest of them don't actually have the money.

See... economics can be so much fun.

A word on privilge

Dear fellow SF Fans,

I'm seeing the word 'privilege' thrown around a lot and I'm not sure it means what some of you think it does.

Being able to afford to go to a science fiction convention isn't a display of privilege or class.  Except in a purely economic sense that it is, and always really has been, an expensive hobby.  The fact that a certain award is tied to that hobby isn't privilege either.

You don't have to be a member of a certain club, nor be a certain gender, sexual orientation or hair colour.  You can just turn up and have fun.  You don't need to be accepted and nominated by your peer group or any other barrier to entry of that kind.  You don't get born into WSFS membership, there isn't a secret handshake (er... there might be, I don't know it.) There isn't even a dress code.

Does the fact that you have to pay to attend the convention and it travels around the world limit access?  Yes, yes it does.  But that's nothing to do with privilege.  Is it unfair if you really want to go and can't afford to...    sorry...  but that argument could apply to pretty much anything that you want to do that you can't afford to do.

Now...  richer people might be richer because they have been privileged, but that's a separate discussion.

Now, if you don't mind, I'm going to go and whinge about the fact I can't go to the International Space Station....