Using a Bar Tab to Explain America's Income Tax System

Dan O'Donnell discusses White House Press Secretary Sarah Huckabee Sanders' tremendous income tax analogy.

Watch the video of Sanders and read the transcript below the podcast.

 
 

In Monday's White House press briefing, Huckabee Sanders said: 

"The numbers are not exact and I’m not encouraging any drinking. That’s mostly for my parents. I think you will enjoy it. Suppose that every day 10 people for our purposes go out for beer. The bill for all 10 comes to $100. If the 10 reporters paid their tab every night the way we pay our taxes, it would go something like this. The poorest would pay nothing. The fifth would pay $1. The 6th would pay $3. The seventh would pay $7. The ninth would pay $18, the richest would pay $59. That’s what they decided to do. The 10 reporters drank in the bar every day and seemed happy with the arrangements until one day the bar owner threw them a carve ball. 

"Since you are good customers, I will reduce the cost by $20. Drinks would now cost just $80. They wanted to pay the bill the way we pay our taxes. The first four still drink for free. What about the other six? How could they divide the $20 windfall so everyone gets their fair share. These were reports and they are concerned with fairness. They realize that $20 divided by six is $3.33. If they subtracted that from everybody’s share, the fifth and the 6th reporter which would each end up being paid to drink beer. The bar owner suggested raising by a higher percentage. He explained they continue following the principle of the tax system they have been using. 

"He proceeded to work out the amounts that each should pay. The fifth reporter like the first four now paid nothing. He got a 100% savings. The 6th now paid $2 instead of $3. The seventh paid $5 instead of $7. The 8th paid $9 instead of $12. The tenth now paid $49 instead of 52. The first four continued to drink for free. Once outside the bar, they began to compare their savings. I only got $1 declared the 6th and she pointed to the tenth reporter. She got ten. ... 

"The next night, the tenth man didn’t show up for drinks and the had their beers without him. When it came time to pay the bill, they discovered something important. They no longer had enough money to even cover half of the bill. That, ladies and gentlemen, is how our tax system works. People who pay the highest taxes will benefit from a tax reduction. Taxing them and attack them and they might drink overseas where the atmosphere is friendlier."

Dan O'Donnell

Dan O'Donnell

Common Sense Central is edited by WISN's Dan O'Donnell. Dan provides unique conservative commentary and analysis of stories that the mainstream media often overlooks. Read more

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