SA Tax system explained

[ystervarkie2006]

Suppose that every day, ten men go out for beer and the bill for all

ten comes to R100. 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 R1.

The sixth would pay R3.

The seventh would pay R7.

The eighth would pay R12.

The ninth would pay R18.

The tenth man (the richest) would pay R59.

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

are all such good customers," he said, "I'm going to reduce the cost of

your daily beer by R20." Drinks for the ten now cost just R80.

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 would they divide the R20 windfall so that everyone would get

his fair share?

They realized that R20 divided by six is R3.33. 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 R2 instead of R3 (33% savings).

The seventh now pay R5 instead of R7 (28% savings).

The eighth now paid R9 instead of R12 (25% savings).

The ninth now paid R14 instead of R18 (22% savings).

The tenth now paid R49 instead of R59 (16% savings).

Each of the six was better off than before and the first four

continued to drink for free. But once outside the restaurant, the men began to

compare their savings.

"I only got a Rand out of the R20, "declared the sixth man. He

pointed to the tenth man, "but he got R10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a Rand,

too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get R10 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!

And that, boys and girls, journalists and college professors, is how

our tax system works. The people who pay the highest taxes 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 somewhat friendlier.

[Dax]

Ek sit nou hier en lag met 'n traan in my oog. Ek lag so hard dat die traan in my oog seker groter is as as Vaaldam.

'n Baie goeie een ystervarkie!

Dax

[Guest Vermeulens]

Excellent, nog 'n rede om die land te verlaat, dankie!

Em

[wislon]

Excellent, nog 'n rede om die land te verlaat, dankie!

Em

Hence the reason I'm leaving and taking my "beer money" overseas with me. I'd rather spend it on "drinking buddies" who'll use it for its intended purpose

[Andre S]

Well, if no one is going to pick up the beer tab, I might as well emigrate too LOL!

A

[Martinp]

Well, if no one is going to pick up the beer tab, I might as well emigrate too LOL!

A

Well done, also exactly why I am moving!

Thanks

[Nilo]

Don't worry guys, as soon as you get here we'll shout you all for a beer! With the efficiency of the Taxman in Aus and prompt refunds we can all afford to.