Blessed are the Persecuted, Indeed

Thomas Frank sneered at conservatism yesterday in his editorial in the Wall Street Journal, Blessed are The Persecuted:

Historically speaking, conservatism is a movement organized and funded by society's most powerful members; politically speaking, it lusts for tax cuts and government rollbacks that will benefit those same fortunate folks at the top.

But what it really is, in its own mind, is a crusade on behalf of society's most abject members: the true Americans who are victimized, sneered at and persecuted for their faithfulness.

Here is a simple little example making its rounds on the internet that shows the lie of Mr. Frank's conclusion and his smugness. I think it is simple enough for even for even Mr. Franks to understand. But maybe not.

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 gosomething 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. 'Since you areall such good customers,' he said, 'I'm going to reduce the cost of yourdaily beer by $20.' Drinks for the ten 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 men - the paying customers? How could theydivide the $20 windfall so that everyone would get his 'fair share?'

They realized 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 wouldbe 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 todrink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixthman. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I got."

''That's true!!" shouted the seventh man. "Why should he get $10 back when Igot 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 ofthem for even half of the bill!
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And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the mostbenefit 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 startdrinking overseas.

David R. Kamerschen,
Ph.D.Professor of EconomicsUniversity of Georgia.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.