- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
The Funny Picture Thread (Try and keep it PG13)
Collapse
X
Collapse
-
-
-
-
The Tax System Explained in Beer.
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 (by taxpayer decile), 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’re 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? How could they divide up the £20 windfall so that everyone would get his fair share?
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 suggest the new lower amounts each should now pay.
And so the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth now paid £2 instead of £3 (a 33% saving).
The seventh now paid £5 instead of £7 (a 29% saving).
The eighth now paid £9 instead of £12 (a 25% saving).
The ninth now paid £14 instead of £18 (a 22% saving).
The tenth now paid £50 instead of £59 (a 15% saving).
The first four continued to drink for free, and the latter six were all better off than before. But, once outside the bar, the men began to compare their savings.
“I only got a pound out of the £20 saving,” declared the fifth man. He pointed to the tenth man, “But he got £9!”
“Yeah, that’s right,” exclaimed the sixth man. “I only saved a pound, too. It’s unfair that he saved nine times more than me!”
“That’s true!” shouted the seventh man. “Why should he get £9 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 day, the tenth man didn’t show up, so the other 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 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 friendlier.Comment
-
-
-
-
-
-
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Micro-entity accounts: Overview, and how to file with HMRC Today 09:27
- Will HMRC’s 9% interest rate bully you into submission? Yesterday 09:10
- Business Account with ANNA Money Nov 1 15:51
- Autumn Budget 2024: Reeves raids contractor take-home pay Oct 31 14:11
- How Autumn Budget 2024 affects homes, property and mortgages Oct 31 09:23
- Autumn Budget 2024: Reeves raids contractor take-home pay Oct 31 09:20
- Autumn Budget 2024: Umbrella companies hit, Employer NICs hiked, and BADR heading for 18% Oct 30 16:54
- Autumn Budget 2024: chancellor’s full speech Oct 30 16:34
- RecExpo got told this about Labour’s Employment Rights Bill… Oct 30 09:10
- A limited company just got one over HMRC on VAT; here’s how Oct 29 09:24
Comment