An old story but an effective illustration and always worth re-reading:
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 landlord changed the situation. "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 total.
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 all knew 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 bar, the men began to compare their savings.
"I only
got a pound 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 pound, too.
It's unfair that he got ten times more than me!"
"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.