A Flaw in the "Restaurant" Analogy for Federal Income Taxes.
By ParaTed2k
@ParaTed2k (22940)
Sheboygan, Wisconsin
November 8, 2007 8:10am CST
We've all heard the story of the 10 men eating at a restaurant and how their bill would come out if it was paid according to the current income tax system in the US.
In the analogy:
* The first four men (the poorest) would pay
nothing.
* The fifth would pay $1.
* The sixth would pay $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) would pay $59.
I was thinking about that the other day, and I have to disagree with it. I don't disagree with the outcome, but I don't think the person who came up with it went quite far enough.
The flaw is, each of the men paid according to his income, but they all got the same food and service regardless of what they paid.
When it comes to taxes, "the rich" pay the bulk of the total tax bill and "the poor" pay nothing. However, "the rich" recieve only the basic services and infrastructure for their money, while "the poor" get the same services and infrastructure "the rich" get.. but then they also get benefits and programs that are unavailable to "the rich".
So, here's my addendum to the analogy...
* The first four men (the poorest) pay nothing, but the waiter takes their order at the table, and brings their food to them, also refills their drink promptly.
* The fifth would pay $1, the waiter takes his order at the table, and brings his foot to him, he gets his drink refilled as often as he asks, but he has to ask.
* The sixth would pay $3, the waiter takes his order at the table, and brings him his foot, but he has to get up and go to the fountain for his drink.
* The seventh $7, has to go to the kitchen to order his food, but the waiter does bring it out to him, he has to go to the fountain to get his drink, he isn't allowed refills.
* The eighth $12, has to go to the kitchen to order his food and to get it, but the waiter will inform him when his order is ready for him to pick it up. Drinks cost extra, and he has to get it himself. No refills.
* The ninth $18, has to cook his food himself, bring it out to the table and he can only have water to drink.
* The tenth man (the richest) would pay $59. No services offered. He can have whatever he wants, but he has to personally hire a cook, waiter, bartender and someone to do anything else he wants done. He also has to tally his own bill, unless he hires someone else to do that to.
Ok, Now we have a valid analogy for our current tax system.
2 people like this
4 responses
@soccermom (3198)
• United States
8 Nov 07
I think you did a great job on telling it how it really works Para. When I first read the original analogy I thought something didn't seem right with it. I told my hubby the other day we'd almost be better off if he lost his job, which is pathetic. Then we would've qualified for government aid to fix our flood damaged home instead of wiping out our savings, we could have food stamps to feed our kids, and no more health insurance premiums, the government would pay for that too. Heck, we may be able to make it off of my income alone! Fortunately, we take pride in the fact that even though things look bleak and we're struggling like heck, we've busted our butts and earned everything we have. I have so many policyholders in my office that collect a government check, don't work, yet drive new high end SUV's that it makes me sick, especially when I think about how it's my tax dollars affording them all this.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
9 Nov 07
When I became disabled and unable to work, we had to go on a few government programs. When my wife finished school and was able to work, we went to get off the programs we were on.
We had to make abou $28,000 to maintain the same lifestyle we did on government aid.
btw, one of the reasons we had to use government aid, as soon as I was getting Social Security Disability (something I had no problem going on, since I paid into it), almost all the private aid we were getting ended.
This is why I say that government aid actually hurts the private aid system, since private aid organizations often decide you don't need their aid anymore once government aid starts coming in.
1 person likes this
@soccermom (3198)
• United States
10 Nov 07
I totally agree. Before we were married I was on Medicaid while I was pregnant with my daughter, my now hubby had currently gotten out of the MArines because of an injusry and I was unable to work because of restrictions due to a difficult pregnancy. Every hospital bill was paid. When I had my son, different story, private insurance didn't cover half of it and we ended up in the hole badly, and nobody to help, we kept getting told to contact government agencies. We never did, and things worked out, but I see why it's so easy for people to take advantage.
@Destiny007 (5805)
• United States
8 Nov 07
This is a very good analogy and goes a long way towards explaining the realities of the tax system.
Of course most everyone in the less than rich classes are going to say something along the lines that the rich should give back to the community for being rich, yet the rich people got that way without any help from the community.
If it wasn't for the rich and the government, most people wouldn't even have a job to begin with, so it seems to me like they have already given back to the community simply by providing the needed jobs.
1 person likes this
@ParaTed2k (22940)
• Sheboygan, Wisconsin
9 Nov 07
Everyone should give back to their community, not just the rich. However, no one (unless it's the result of a conviction) should be forced to "give back" to their community.
@bravenewworld (746)
• United States
9 Nov 07
Well, you're analogy may be accurate, but I'm not sure ti makes it necessarily a bad system. It doesn't tell the whole story.
To play devil's advocate.. The richest will be able to hire someone to tally the bill, hire someone personally to cook his food, etc, and he'll do it at some fancy restaurant beyond the means of the poor people with their handouts. Malnutrition may be the result of denying the poor their handouts, while even with their large tax burden, the rich will still be left with more money than they know how to spend.
I agree, however, that the system can easily be abused. Nobody should be better off with handouts than if they were working (assuming a realistic minimum wage). Large SUVs should not be part of the handout (though it seems you can get a car loan however bad your finances, and that's a different problem). I think the answer is to limit the abuse, not withhold assistance from those that need it due to a minority of 'bad apples'.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
9 Nov 07
Hiring people should be a choice made by employers, not because they were forced to create jobs to satisfy government requirements.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
9 Nov 07
I have my problems with the whole Minimum Wage thing, but that's an issue for another thread.
@bravenewworld (746)
• United States
9 Nov 07
I cant' argue with that.
But maybe you're saying there shouldn't be a minimum wage. I do believe a minimum wage is necessary.

