This right wing Beer analogy stinks of Two Right Wings, Wont Fly! unless your drunk.-It is meant to distract from the complexities to support a tax plan that will provide the greatest benefit to those who need it least, at the expense of programs that assist those most in need.

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Bad Analogy: Beer and Taxes
Posted on October 31, 2017 by The View from the Armchair
Analogies and metaphors are commonly used to make complicated or confusing subjects more understandable to a wider audience. There are times when an analogy is very helpful for putting a concept into a context that is more relatable. To paraphrase a comedian (whose name I cannot recall) explaining why he doesn’t understand why his male friends get so upset about being hit on by a gay man: Getting mad about a gay man offering to show you a good time is like getting mad about someone offering you money in the wrong currency. I thought that was a pretty good analogy (and joke).
In some cases we try to force analogies where they are not required. In the context of a business, the leader wanted to explain that focusing on long-term objectives did not preclude ensuring near term priorities were being met or that opportunities should not be assessed and capitalized as warranted. I actually think that is a pretty straight-forward concept. The leader thought an analogy was required though, which was that while we’re hunting the mammoth, we need to still kill a few deer to sustain the hunt. Unnecessary, and problematic. Mammoths are extinct. Why are we hunting an animal that no longer exists?
Even when employed properly, analogies and metaphors seek to simplify the complex, which means they have a large risk of oversimplifying complex and nuanced problems or ideas. But, if your goal is to obfuscate, this risk becomes a reward. The bad analogy is the floatation device of the disingenuous argument.
For example, let’s say you want to talk tax policy. That’s pretty complex, and our progressive tax system – even when not getting into the weeds of the volumes of tax code that lay out the specifics of how revenue is calculated for tax purposes – is not well understood. If your goal is to lead someone to an improper conclusion about tax fairness, you might construct an analogy about spending money as a group. Maybe, 10 reporters buying beer for $100. You would explain how one reporter pays more than the others because of his affluence, and how a discount applied by the barkeep in a manner consistent with current tax code would benefit the people who already pay little more that the guy who pays a lot. Seems unfair for that guy footing the bill, yeah?
The point one might attempt to make here is that a tax cut necessarily benefits the wealthy necessarily by virtue of the fact that they pay so much, even if the percentage of a cut that goes to them is less than to middle- and low-income earners. That’s a technical fact that ignores nearly all of the specific arguments and issues related to what would constitute and appropriate modification to tax policy. That isn’t accidental; the point of an analogy like this is to distract from core issues of the argument.
Some of this analogy’s flaws are fairly glaring, most notable that making a purchase (of beer, or anything) is not at all the same as income tax. Income tax is tax on revenue earned. On a purchase there is sales tax, which is a flat rate based on the total cost of the purchase. Anyone making a purchase pays this same rate of tax irrespective of income (assuming the can afford the item(s)). Splitting a bill has nothing to do with either of these types of tax.
In fact, splitting the bill deals more with an area that this analogy seeks to deliberately avoid; wealth. While talking about a $100 bill split between 10 reporters, it would be fair to talk about how much money each reporter has to spend. Let’s make that $1000, just for discussion’s sake. In the US, the top 10% controls about 77% of the total wealth. So one reporter has $770, and the other nine share the remaining $230. So if the one rich guy picked up the whole $100 tab he would still have almost three times as much wealth as the other nine reporters.
This is still an oversimplification. There are many factors to consider, including the likelihood of saved income to be infused in the economy (through spending) and the impact on government provided programs if tax revenue is reduced (or raised). Some generalities that are pretty clear include that the wealthiest Americans save more than they spend and that most programs that are designed to help low-income Americans would be in danger if tax revenue were reduced. In general, large reductions in tax revenue from the wealthiest Americans do not seem to stimulate increases in spending or GDP. The result over the last several decades has simply been a higher concentration of wealth in fewer hands. And previous periods of strong economic growth in the US have been correlated with very high marginal tax rates. That correlation does not prove that higher taxes on the very wealthy stimulate the economy, but it certainly indicates that higher taxes don’t stifle the economy.
In any case, analogies about buying beer do not even begin to address the complexity of deciding how to best fund necessary government programs while stimulating economic growth. More to the point, such an analogy isn’t meant to do so. It is meant to distract from the complexities to support a tax plan that will provide the greatest benefit to those who need it least, at the expense of programs that assist those most in need.



Edited 2 time(s). Last edit at 12/29/2017 05:11AM by riverhousebill.

Jennifer, where and when did you find this beer analogy?

(SPLINTER)

That Weird Analogy About Beer and Tax Cuts Was Dumb as Hell

Hamilton Nolan
10/31/17 2:29pmFiled to: taxes


Photo: AP
Yesterday, Zoltar-esque Trump administration flack Sarah Huckabee Sanders opened the White House press briefing with a long, meandering story that purported to use an analogy about buying beer to explain the logic of the Republican tax cut plan. You may be flabbergasted to learn that this story, which was literally borrowed from an old FW: FW: FW: viral email, does not make sense.






 


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What—a 2011 viral email read stumblingly from a White House podium by a spokesperson desperate to avoid questions about criminal indictments over Russian-influenced corruption is not the best explanation of America’s tax code today? I know. I too was dumbfounded. But here we are. You can watch the interminable video of Huckabee Sanders telling the story here, or just read the text version of it below, originally attributed to University of Georgia economics professor David R. Kamerschen**:
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, 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.
It’s so long!
Like most email forwards popular with your mom’s more untethered friends, this story has a surface appeal. You can just imagine a satisfied economics professor patiently telling this little parable to unsophisticated bumpkins, like University of Georgia students, or the president of the United States. It all sort of slots in at the end, like a satisfying bad movie.


But let us now ask ourselves: Is this story of sharing a bar tab an accurate analogy for the U.S. tax system? No. A few points:
In this story, the “ten men” represent the population of the United States and the $100 bar tab represents the US federal budget. But our government’s budget is nothing like a bar tab that comes out to the same damn dollar amount every day. Our budget changes every year because it is just the total cost of the things that we collectively choose to spend money on. It is in fact a statement of our priorities. It is not static. If there is a war, or natural disasters, or if we just decide that hey, we need to spend more money on science to cure cancer and we need to pay more for early childhood education because it’s the right thing to do, the budget goes up. America doesn’t roll out of bed every year and get delivered on a platter a bill for all services that is equal to that of the previous year. America gets together and decides what we want our budget to be, and then we figure out how to pay for it, or not. Instead of ten guys walking into a bar and ordering the same exact beers every day, imagine ten guys plus their families plus everyone who lives in their town being dumped in a Walmart once a year and forced to decide what to buy to build a civilization for the following year. You can see how the math might not be so neat!
I guess the owner of the bar in this analogy represents, uhh, Congress? And we are supposed to imagine that the owner’s magnanimous 20% price reduction is the equivalent of Congress passing a 20% national income tax reduction? But of course, in the same way that America’s budget is not just a number but a statement of our values, so too is our tax system. It is a tool that we use to even out the built-in inequities of our economic system, at least a little. A 20% reduction in our total national budget would not be a nice gift—it would be chaos! Social Security cuts! Medicare cuts! Vital social spending slashed! Fewer aircraft carriers, for the gun people! Taxes pay for things we use, and tax cuts have real human costs that are not at all analogous to getting a discount on beers. Furthermore, this little beer story is meant to mock the idea that poorer people would be angry that rich people got the lion’s share of proceeds from tax cuts. But why? We have a progressive tax system because we believe the rich should pay more, and we believe that because the rich can pay more, and the idea that tax cuts should automatically accrue to those who, yes, pay more taxes now but are also, still, the richest people is not at all an automatic logical progression. Diminishing marginal utility, motherfucker.
In this story, the bottom 90% of people surround the top 10% and beat them up, for being greedy. This has never happened in America, despite the best efforts of SplinterNews.com.
If only the president of the United States had access to economic information that did not come from mass email forwards. We can dream!

**Update: In fact, the original author of this email forward may be lost to history; University of Georgia professor David Kamerschen denies that he is the author. Regardless, University of Georgia students are still bumpkins.

Number 1: This thread is superfluous because your posts here should have been in my original thread with the Beer Analogy.

Number 2: I'm not telling where I got it because you never tell where you get your stuff; you just copy and paste articles and even copy and paste others' comments.

Number 3:

This paragraph you posted above:

Quote

But let us now ask ourselves: Is this story of sharing a bar tab an accurate analogy for the U.S. tax system? No. A few points:
In this story, the “ten men” represent the population of the United States and the $100 bar tab represents the US federal budget.

The only person saying the ten men represent the population of the US and the $100 bar tab represents the US Federal budget is this self same guy who the goes on below to refute it, so his whole argument below is based on his own fallacy.

Quote

But our government’s budget is nothing like a bar tab that comes out to the same damn dollar amount every day. Our budget changes every year because it is just the total cost of the things that we collectively choose to spend money on. It is in fact a statement of our priorities. It is not static. If there is a war, or natural disasters, or if we just decide that hey, we need to spend more money on science to cure cancer and we need to pay more for early childhood education because it’s the right thing to do, the budget goes up. America doesn’t roll out of bed every year and get delivered on a platter a bill for all services that is equal to that of the previous year. America gets together and decides what we want our budget to be, and then we figure out how to pay for it, or not. Instead of ten guys walking into a bar and ordering the same exact beers every day, imagine ten guys plus their families plus everyone who lives in their town being dumped in a Walmart once a year and forced to decide what to buy to build a civilization for the following year. You can see how the math might not be so neat!
I guess the owner of the bar in this analogy represents, uhh, Congress?

Again, this guy's saying the owner of the bar represents Congress and then goes on Below to refute that the barowner represents Congress, when he's the only idiot who ever said it Did represent Congress. Come on!

Quote

And we are supposed to imagine that the owner’s magnanimous 20% price reduction is the equivalent of Congress passing a 20% national income tax reduction?

No, you're the only one who said that with you're transparent twisting and spinning.

Quote

But of course, in the same way that America’s budget is not just a number but a statement of our values, so too is our tax system. It is a tool that we use to even out the built-in inequities of our economic system, at least a little.

No, it's not 'a tool that we use to even out the built-in inequities of our economic system', it's a Redistribution of Wealth used by Force of Government to take from the people-who-the-Libs-call-"The Rich" and give to "The-Poor". You know - Like Robin Hood - take from the rich and give to the poor. Only the Robin Hood Official Story/Interpretation is not true BTW.

Quote

A 20% reduction in our total national budget would not be a nice gift—it would be chaos! Social Security cuts! Medicare cuts! Vital social spending slashed! Fewer aircraft carriers, for the gun people! Taxes pay for things we use, and tax cuts have real human costs that are not at all analogous to getting a discount on beers. Furthermore, this little beer story is meant to mock the idea that poorer people would be angry that rich people got the lion’s share of proceeds from tax cuts. But why? We have a progressive tax system because we believe the rich should pay more,

No, "We" don't believe 'the rich should pay more' - the Libs believe 'The Rich' should pay more... "We" the other side, Conservatives, believe in A Flat Tax where everyone pays the same percentage or even A Fair Tax where A Value Added Tax is added to purchases that we make. "We" on this side also believe in a Simplified Tax Code, say one page. And even "We" Libertarians/Fiscal Conservatives do not believe in paying taxes at all! It's called "Abolish the IRS".

Quote

and we believe that because the rich can pay more, and the idea that tax cuts should automatically accrue to those who, yes, pay more taxes now but are also, still, the richest people is not at all an automatic logical progression. Diminishing marginal utility, motherfucker.

Cripes, so you're also saying that not only should 'The Rich' pay more than everyone else, but if there are ever tax cuts (which almost never happens and never happens under The Libs) the 'The Rich' should not get any Tax Cuts, but 'The Poor' who pay little or no taxes should get all the tax cuts... Yeah, you guys (meaning the Libs) are the 'Greedy' ones, not us. And how is that 'fair' and 'equal' like you guys (meaning the Libs) are always espousing.

Quote

In this story, the bottom 90% of people surround the top 10% and beat them up, for being greedy. This has never happened in America,

Yeah, it happens all the time and/or the Lib activists are trying to make it happen all the time metaphorically or in actuality ala Occupy Wall Street/Knockout Game/Ferguson Lie/Black Lives Matter/ANTIFA, etc.

Quote

If only the president of the United States had access to economic information that did not come from mass email forwards. We can dream!

If only rhb would post links to his sources...

Jennifer that right wing beer analogy you copy and pasted with no link
is bull @#$%&

Quote Jennifer-If only rhb would post links to his sources...

did you copy and paste from White House Sara Huckabe? the timeing says so

Wow, you guys (meaning The Libs) hate Sarah Huckabee... how you all despise Conservative women - like Melania Trump, Sarah Palin, Ann Coulter, Michele Bachmann, etc.

Jennifer your timing on the cutting and pasting of Beer analogy and taxes
A day after Sara White House press release. Hum your not going to tell me the source?

Go here -

[www.rawfoodsupport.com]



Edited 2 time(s). Last edit at 12/30/2017 03:52AM by Jennifer.

BeforeTheRobots 1 point 3 years ago 

The American tax system is immense. If you printed out the corpus of tax law, single-spaced, on standard printer paper it would be almost 75,000 sheets. There isn't an analogy in the world that could describe this.

Quote
riverhousebill
BeforeTheRobots 1 point 3 years ago 

The American tax system is immense. If you printed out the corpus of tax law, single-spaced, on standard printer paper it would be almost 75,000 sheets. There isn't an analogy in the world that could describe this.

Yes, that's why we need to Abolish the IRS or at least Simplify the Tax Code. Make a Flat Tax of 10% for everybody. Or a Fair Tax/VAT.

The new Tax Bill of Trump's is crap, also. Just more shell game. Complex tax code. And it includes the Lib rhetoric - by raising taxes on The Rich.

Mark Levin: The Truth about the Republican Tax Plan

[www.youtube.com]

Mark Levin blasted the GOP’s tax plan in the House and Senate, warning that it is a “flat out lie” that the GOP tax plan is the greatest tax cut in American history.

“They talk about this being the greatest tax cut in American history,” said Mark Levin. “That is a flat out lie.”

“It’s absolutely a disgrace. And the president keeps saying this is the biggest tax cut in American history — no, it’s not. “So in order to reduce the corporate income tax, which I feel they should … they are slamming it to millions of Americans.”

*******

The GOP’s hidden 46% tax bracket

If you’re rich enough, some of your income is taxed at a rate unseen since the ‘80s.

[www.politico.com]

"House Republicans claim the tax plan they introduced Thursday keeps the top individual rate unchanged at 39.6 percent—the level at which it’s been capped for much of the past quarter-century. But a little-noticed provision effectively creates a new band in which income is taxed at over 45 percent.

Thanks to a quirky proposed surcharge, Americans who earn more than $1 million in taxable income would trigger an extra 6 percent tax on the next $200,000 they earn—a complicated change that effectively creates a new, unannounced tax bracket of 45.6 percent.

The bubble tax, in other words, is a way for the GOP to quietly raise much-needed revenue without changing the broader features of the bill. But it does mean that the top marginal tax rate would rise above 40 percent for the first time since 1986—the last year that Congress overhauled the tax code."

I don't understand exactly how the monetary system works, but the creation of money needs to be backed by something - like gold - to be stable or else printing money willy nilly creates inflation, so money has no value and an orange would end up costing $500. But crypto-currency would be interesting I guess.

Woodrow Wilson removed the US from the Gold Standard and created the Federal Reserve.

Woodrow Wilson initiated the Income Tax.

"From the earliest days of the republic, the U.S. federal government had sought out ways and means of raising revenues beyond customs duties, tariffs, imposts, and the like. The Civil War had given the nation a taste of a national income tax, but the politics and legal climate of the postwar environment led to its rapid demise. A later effort in the 1890s to raise a national income tax was struck down by the U.S. Supreme Court.

Finally, however, in 1909, Congress passed the 16th Amendment to the U.S. Constitution, explicitly giving Congress the “power to lay and collect taxes on incomes, from whatever source derived.” After several years of bitter political infighting (including the nullification of previous ratification by a number of states), ratification by three-fourths of the states was completed on Feb. 3, 1913, just prior to Wilson’s inauguration. And just in time for the new U.S. president, a man self-described as “ordained by God,” to put it to the test.

The 16th Amendment led directly to the enactment of a national income tax in Wilson’s first year in office, albeit only on a small class of people known as “wealthy” citizens. These “rich people” were then defined as those earning over $4,000 per year, or the modern equivalent of a household today earning about $80,000. But wealthy or not, the power to tax incomes was the breach in the dam holding back federal power and influence based on spending by the central government.

Before Wilson was elected president, federal government spending had never exceeded 3% of the gross domestic product, except during the War of 1812 and the Civil War. Federal revenues were derived primarily from customs levies, import duties, and various other excises and tariffs. During Wilson’s two terms as president, the dam burst, and federal spending rose to more than 20% of GDP."

He also is responsible for the 17th Amendment to the U.S. Constitution, which called for the direct election of senators.

The Wilson Presidency -

"Byron King explains how the world we’re all living in today was essentially created by President Woodrow Wilson during his Presidency.

“If… Woodrow Wilson intended from his first day in office to transform America, to increase both the size and scope of government, and to put government ‘at the service of humanity,’ here were his tools.”

During his two terms as president of the United States, Wilson inalterably changed the face of not just the United States, but of the world. The community of nations today represents a world still spinning on a Wilsonian axis.

Since Colonial times, U.S. national governance and economic development had focused on westward expansion across the continent. When Wilson took office in March 1913, the United States was a gold-standard nation, developing inwardly and filling its own continent with people, industry and capital. The U.S. economy in 1913 was focused on internal investment and organic growth. The nation had few historical precedents or cultural proclivities for international adventurism."

To the extent that U.S. policy acted aggressively abroad — such as with the creation of the nation of Panama out of a province of Colombia and the construction of the Panama Canal — it was for matters perceived to be of vital national strategic interest. Beyond such vital strategic interests, the nation was experiencing a bad case of indigestion of even the modest fruits of the Spanish-American War , the military and financial cost in 1913 being a sore spot with the voters and taxpayers.

When Wilson left office eight years later, in 1921, he had involved the nation in Europe’s Great War and was in no small measure personally and exclusively attempting to dictate the world’s peace. Under Wilson’s stewardship, the federal government was large and getting larger, the U.S. currency was beginning a long slide into debasement, and no American could even buy a legal drink at a humble saloon.

No one can truly understand the issues of the modern era without knowledge of the man who midwifed it into existence. It is not too much to say that the 20th century was Wilson’s Century, and that we live in Wilson’s World."

More about The Wilson Presidency here -

[dailyreckoning.com]

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