Ferrari Mailing List: Re: Barstool Economics (was RE: Are Ferraris Losing Their Good Looks? )

[Mike Fleischer (themightytoe]

Wow

I fully agree our system is not fair and it really is a form of charity 
to a large extent, no question.  It seems the arguments here are based 
on just the numbers, but what is missing here is any compassion for your 
fellow man.  Sure I work hard to provide for my family and I worry about 
their financial security and future but I also recognize that I live in 
a society with other people and reading this I recall an old adage my 
parents used to tell me: "the world needs ditch diggers too"... 

Here is a different view of the same problem...

We had beer at the bar as an example and that is a luxury item for many, 
but lets put this in the perspective of the truly poor.  Lets say for 
these men to meet the minimum needs of their families they have to spend 
$50 each year.  And lets say that the beer we are talking about is 
actually an increase in that $50 by $10 each...  Total additional cost 
for all ten is still $100

With our current system:

The first four men (the poorest) would pay nothing.   They earn $50 a year 
(just scraping by)
The fifth would pay $1.  He earns $55 a year (1.1x)
The sixth would pay $3. He earns $60 a year (1.2x)
The seventh would pay $7. He earns $75 a year (1.5x)
The eighth would pay $12. He earns $100 a year (2x)
The ninth would pay $18. He earns $150 a year (3X the poorest)
The tenth man (the richest) would pay $59. He earns $300 a year (6x the poorest)

Now if it were fair each would pay an equal share of $10 each?  So

The first four men (the poorest) can't pay the $10 each...  They and their 
families freeze to death.
The fifth would pay $5.  He earns $55 a year (1x), he can't pay so he freezes 
to death probably shortly after burying the previous 4 families.
The sixth would pay $10. He earns $60 a year (1.1x), now he is scraping by and 
is hoping that an increase does not come since he can't afford a new shovel.
The seventh would pay $10. He earns $75 a year (1.2x), ok he can pay.  He can no longer afford that big screen TV for Xmas however, so no Nascar for him. 
The eighth would pay $10. He earns $100 a year (1.5x), he can pay.  He will  be able to go to the Monaco GP the coming year and rent a Ferrari instead of a VW on what he saved.  
The ninth would pay $10. He earns $150 a year (2X the poorest), he can pay.  Has to think about buying that vacation home a year sooner, there may be some vacancies in lower rent neighborhoods next year...
The tenth man (the richest) would pay $10. He earns $300 a year (6x the 
poorest) he buys himself a 5th Ferrari with the money saved, red of course, but 
it turns out he can't get an extra addition built for his garage anytime soon 
since his contractor's labor force all froze to death...

But hey you are right it is immoral and socialist to pay an unequal share...  
Really it is stealing.  Maybe I will have to think about that as I drive by 
those stiff corpses in my new Ferrari on my way to Church on Sunday.  Hopefully 
no one will notice how truly hideous my car really is?

Or I suppose I could run away to the Cayman Islands?  That does have its 
appeal, and the poor folks don't freeze there, I think they just get washed out 
to sea in a Hurricane...


Steve Cook wrote:
> 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 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 $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 they divide 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 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 restaurant, the men began to compare their savings. 
>
> 'I only got a dollar 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 dollar, too. It's unfair that he got ten times more than I!' 
> '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! 
>
> 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. 
>
> David R. Kamerschen, Ph.D. 
> Professor of Economics, University of Georgia 
>
> For those who understand, no explanation is needed. For those who do not 
> understand, no explanation is possible
> --------------------------------------------------------------------------------------------------
>
> (And by not showing up, it only takes moving things to off-shore accounts - 
> which is entirely legal BTW). I'll put my money to work somewhere where it's 
> appreciated and not stolen.
>
> -steve
>
> ---------------------------------------------------------------
>
>
> -----Original Message-----
> From: jashburne [at] aol.com [mailto:jashburne [at] aol.com] 
> Sent: Wednesday, November 12, 2008 1:13 PM
> To: Steve Cook
> Cc: The FerrariList
> Subject: Re: [Ferrari] Are Ferraris Losing Their Good Looks?
>
> Growing prosperity is. a good thing.
>
> Having incentives so that people can become prosperous is a good thing.
>
> Risk takers, providers of capital and employers should have risks (being 
> removed with bailouts now) and rewatds
>
> T Boone has lost hundreds of millions with his new alternative fund but he 
> isn't crying for relief.
> Sent from my Verizon Wireless BlackBerry
>
> -----Original Message-----
> From: Michael James <cavallino_rapante [at] yahoo.com>
>
> Date: Wed, 12 Nov 2008 11:32:55 
> To: <jashburne [at] aol.com>
> Cc: The FerrariList<ferrari [at] ferrarilist.com>
> Subject: Re: [Ferrari] Are Ferraris Losing Their Good Looks?
>
>
> I won't deny that there's a growing animosity brewing between the 'haves' and 
> the 'have-nots' in this country, but its hard for me to sympathize with a 
> socio-economic class of people who:
>  
> - are growing in numbers, both in the number of newly-minted Millionaires and Billionaires
> - are growing in amounts/share of global wealth they personally hold
> - aren't complaining or asking for relief from this situation
>  
> These are facts regardless of political persuasion.
>  
> (SO what... those facts don't support punishing MORE people with higher taxes).
>
>
>
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