The fiscal properties of beer
NOTHING is certain in life except death and taxation. Taxes are generally on a sliding scale, punishing the really high earners. But it's contentious. Barack Obama has caused a huge row in the US by proposing a special tax on those who earn a million dollars a year. The Republicans accuse him of class warfare.
It's a vexing question and not as clear-cut as might seem. It has more than passing relevance to ourselves.
Reader Al Cameron, of Richards Bay, expresses it in terms of beer.
If every evening 10 men go out for beers and the bill for all comes to R100, he says, if they pay their bill the way we pay our taxes, the first four (the poorest) pay nothing. The fifth pays R1. The sixth pays R3. The seventh pays R7. The eighth pays R12. The ninth pays R18. And the tenth (the richest) pays R59. That's what they do.
Then one day the owner says they are such good customers, he's going to reduce the cost by R20. Drinks for the 10 are now just R80.
The group still want the taxation formula. The first four are unaffected and still drink for free. But how do the paying customers divide the R20 windfall? R20 divided by six is R3.33. But if they subtract that from everybody's share, the fifth and the sixth man end up being paid to drink beer.
The landlord suggests it would be fair to reduce each man's bill by a higher percentage, the poorer he is, to follow the principle of the tax system. The fifth man, like the first four, now also pays nothing. The sixth now pays R2 instead of R3 (a 33 percent saving). The seventh pays R5 instead of R7 (28 percent). The eighth pays R9 instead of R12 (25 percent). The ninth pays R14 instead of R18 (22 percent). The tenth pays R49 instead of R59 (16 percent).
Each of the six is better off. And the first four continue to drink for free. But, outside the bar, the men begin to compare their savings. "I got only a rand out of the R20 saving," declares the sixth man. He points to the tenth. "But he got R10!"
"Yeah, that's right!" exclaims the fifth. "I saved only a rand too. It's unfair - he got 10 times more benefit than me!"
"That's true!' shouts the seventh man. "Why should he get R10 back, when I get only R2? The wealthy always win!"
"'Wait a minute!' yell the first four in unison. 'We didn't get anything at all. This new tax system exploits the poor!"
The nine men surround the tenth and beat him up. Next night he doesn't show up for drinks, so the nine sit down and have their beers without him. But when it comes time to pay, they discover they don't have enough money between them for even half the bill.
"And that, boys and girls, labour unions and government ministers, is how our tax system works," says Al. "The people who 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 any more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
"For those who understand, no explanation is needed. For those who do not understand, no explanation is possible."
Yes, and the distressing thing is the yawning gap between those who get it and those who will never get it. But isn't it odd how the use of beer as an analogy clarifies issues? In vino veritas. In Castle claritas.
Orange croc
SNAPPY, a 2.5m crocodile at the Roaming Reptiles wildlife park in Victoria, Australia, has suddenly turned bright orange. His keepers think it's caused by vegetation and algae in his water, there because he attacked and chewed up the filtration pump.
If he stays that colour they could always put a bowler hat on him and send him to Northern Ireland for the marching season.
Tailpiece
A BLONDE is flying to New York. How do you pinch her window seat?
You tell her the seats in the middle row are the ones going to New York.
Last word
The only winner in the War of 1812 was Tchaikovsky.
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