An explanation of the UK tax system: Are you the 10th man?

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Posted by Mark | Posted in Prestige | Posted on 22-04-2010

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An explanation of the UK tax system:

Every day, 10 men go out for beer & the bill for all 10 comes to £100.  If they paid their bill the way we pay our taxes, it would go something like this:

The 1st 4 men (the poorest) would pay nothing.  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 10 man (the richest) would pay £59.

So, that’s what they decided to do.

The 10 men drank in the bar every day & seemed quite happy with the arrangement, until 1 day, the owner decided to help them out.

‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beers by £20. Drinks for the 10 now cost just £80.’

The group still wanted to pay their bill the way we pay our taxes so the 1st 4 men were unaffected. They would still drink for free. But what about the other 6 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 6 is £3.33. But if they subtracted that from everybody’s share, then the 5th man & the 6th 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, & he proceeded to work out the amounts each should pay. & so:

  • The 5th man, like the 1st 4, now paid nothing (100% savings).
  • The 6th now paid £2 instead of £3 (33%savings).
  • The 7th now pay £5 instead of £7 (28%savings).
  • The 8th now paid £9 instead of £12 (25% savings).
  • The 9th now paid £14 instead of £18 (22% savings).
  • The 10th now paid £49 instead of £59 (16% savings).

Each of the 6 was better off than before & the 1st 4 continued to drink for free, but once outside the restaurant, the men began to compare their savings.

“I only got a pound out of the £20,” declared the 6th man. He pointed to the 10th man, “but he got £10!” “Yeah, that’s right,” exclaimed the 5th man. “I only saved a pound, too. It’s unfair that he got 10x more than I!” “That’s true!!” shouted the 7th man. “Why should he get £10 back when I got only 2? The wealthy get all the breaks!” “Wait a minute,” yelled the 1st 4 men in

unison. “We didn’t get anything at all. The system exploits the poor!” The 9 men surrounded the 10th & beat him up.

The next night the 10th man didn’t show up for drinks, so the 9 sat down & had beers without him. But when it came time to pay the bill, they discovered something v important…. they didn’t have enough money between all of them for even half of the bill & that, is how the UK tax system works.

Are you the 10th man?

Comments (2)

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