The Tax System-Explained with Beer!!

I can relate to beer being a Canadian and all so I saw this online somewhere and it makes sense to me so I'm sharing it. It explains a lot and puts taxes into perspective.

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

New Beginnings!!

So my hubby and I looked at the ugly truth and looked at our finances last night. It was not pretty but not that bad at the same time. Yes, we were over extended like the majority of this country but we think we can get out of our credit card debt in a few years IF we are mindful of our spending. Our expenses were ugly and I think I was in shock we spent so much money at Target just turns your stomach sour. It was like we were living a rich man's lifestyle on a poor man's salary. It's the whole saying "Buy now and Pay later" but the problem with this is the paying later. I think we had good intention to just pay later but it's the vicious cycle where you plan to pay your debt back but you keep spending and then the pay later gets bumped further into your future. I think Credit is Evil!! Not worth it and it's one of those things I wish we didn't apply for credit. I think it would have been good to just have one but having several not a great idea but it's reality and so we have to change how we look at money so we can pay off those damn credit cards. Those cards are a thorn in our children's future. They got to be paid off!!! So we have a plan. Right now, it's cutting out some expenses we can live without. Not eating out as much and reining in on the grocery bill to just buy what we need to just buying a lot of junk food. All the extra nonessential spending is out meaning no more buying like we're rich at Target anymore and going back to spend the basic needs for the kids. Of course, their are expenses we have that we can't change because it's the bills like mortgage, power, water, garbage etc. No more living like we have a money tree!!! It's a process and we made a choice to look at our finances every two weeks. It's going to be tedious for a while but you know saving for our families future is worth staring at income statements and balance sheets every 2 weeks. I'm getting excited because if we're smart we can get at least 3 of our credit cards paid off in ONE year or confidently 2 cards paid off in one year. By our calculations if we just are frugal with our spending not to the point of pinching pennies but being realistic about our wants verses our needs we can live comfortably and save money. The goal is paying off those credit cards for good and going back to just having one. I think in a couple of months our 2 kids will be getting their College Funds started. That's exciting to me. I think that's an accomplishment as a Mother to give this gift to my children and actually start on the road then just talking about it and doing nothing until it's too late. I know I can do this and I have excitement I haven't felt in along time. I really want this and I know it's going to pay off. It's like the mentality of wanting to become rich by only buying Lottery Tickets. That's fine because people have won big but you could be waiting your lifetime and never win. Instead of waiting for my large payout from the Lottery I'm taking that first step to making my Lottery winnings by doing instead of waiting. No one is going to make us have financial Security and now I feel like I'm on some infomercial plugging some product for getting rich. You know maybe my family won't get rich by changing our spending but we'll be way better off then we were a month ago by not doing anything. We're taking our family back to a healthier financial living and to me that's better than just talking about change and not actually changing. We're changing for the better!! Take care, Peace!!

Cleaning up my life!!

Where to begin...wow who knew life can be so complicated and wonderful all at the same time. I feel like I'm starting a new journey and right now it's a little out of control and I'm figuring out how to change things for the better. It's just getting started and where to begin is the question of the day. I make lists and in the past it has worked for me to get thing under control and lists of things I need to get done but my lists are so long it's kind of overwhelming. It's so overwhelming I just want to put my hands up in the air and just forget about it like the saying "out of sight, out of mind". The crazy thing is if I want to have a new beginning I have to start somewhere right? So no matter how I'm feeling it has to get done. First, my hubby and I are changing out spending habits and that in itself is a little daunting. You get so used of something like buying material things that life has to offer and then telling yourself no is a challenge like going to Target is our biggest problem. We just can't go there and expect to just get everything on our list because we are weak and things just attempt us to buy buy buy and we know we shouldn't buy those things but at the time it felt really good. We have to stop doing that. So Target will be a struggle to just say No!!! Trust me, it will be hard and I have to be honest with myself because they have a good book selection and that's the reason I don't go to the bookstore anymore because the temptation to not buy just one book is something I have a problem with. I love to read and exercise my mind but I know going to the bookstore is hard for me to not buy the whole store. We also have a problem saying no to the kids. They are blessed for sure. So just saying no is going to be hard. Okay, so my family wants financial success and that's something I want to talk about. My hubby bought a book last week he was so excited about. He was raving big about it and wanted me to read it. It's called Rich Dad, Poor Dad. I saw advertisements about it on Facebook and I just thought it was some get rich quick scam and passed right by it. So after he was done reading the book I started reading it. I got motivated like so much so I'm determined with a new sense of personal power. I haven't felt this inner rush in along time. If my family wants to have financial security we definitely need to change out lifestyle. We need to get out of debt like credit cards and start being smart with our money. It's so simple yet at the same time so hard to change bad habit's. My family has bad habit's. By USA government standards we are smack dab in the middle of Middle Class but we're not wealthy because we enjoy spending money and not getting anywhere to financial freedom. We always talk about what we want like send our kids to private school and go on nice vacations to Disneyland but we would love to do those things without being in serious debt. We want to save money for our kids to have nice College Funds and know if we don't do something now while they are only 5 years old and 3 years old their will never be any money to do those things. My hubby and I would love to give our children financial security so they can grow but to do that "we" as their parents have to show them by example. Showing them how money works and know about debt like credit cards and such they can become financial wealthy themselves in their futures without all the baggage that goes on when they become adults. I decided to go back to school not in a classroom but self teach myself and the best part is I can still buy book. Instead of buying the books I'm used to but buy books that will help our family with financial success. Yesterday I bought some financial books and I will study until the cows come home. Whatever I have to do to make my family successful so money isn't an issue. Yes, it would be nice to be considered rich. We're not there yet but if my family is smart and let our money work for us instead of working for our money then we'll be doing okay. We'll be able to do the things we want for our family like vacations and college funds, private schools and maybe a new car with out a car payment. That will be financial success!! The path we're on right now isn't allowing us to do that. Yes, we could take vacations and put it on credit and pay back later but it won't help find money our children's future. For me, I would rather give our children money so they can go to college without my hubby and I having to borrow money or take equity out of the house just to pay for it. Another thing I need to do is start managing our families house chaos. I say chaos because we have material things we don't use anymore that is just collecting in our house which turns our house in a garage dump. Everything we don't need has to go. So organizing our house is another thing I have anxiety to do. I need my hubby for this but the last few months he has kind of checked out of our family. He still provides for us but he would rather just sit on the couch and play video games then deal with household chaos after he comes home from work or do things around the house on weekends. I don't hound him because he's my partner not my child. I don't think being the nagging wife will make the situation better so I have to be more creative and if that means I have to do most of it myself so be it. Doing nothing just because my hubby doesn't want to help in that way isn't going to be very smart. I don't fault him on this because he goes far and beyond the call of duty on other things for our family. He's appreciated very much so and if he needs to sit on the couch for a few months then that's what he needs to do. In saying that, things still needs to get done around the house so it's all on me to bring my family back from the brink of self destruction. With the already drained energy I do have will be a struggle in itself but I know I can do something if I put my mind to it but some days I'll most likely be crying in a heap on the floor and my hubby will just give me the strength to keep going forward out of love because he does that on more occasion then I care to admit. Thanks Hon!! I don't want my family to struggle if we don't have too. I would like this new journey in my families lives be a good life lesson and blessing then years down the road and not have done anything. I want to be a smart mother not a struggling mother. Our family is blessed to have a roof over our head, food on our table and clothes on our backs but material things is just that..things and if you are struggling to live for things then what's the sense in buying it if it's only causing you struggles. It's not worth it to me. I don't like change and I can tell you I can fight it tooth and nail but this is a gift of change I want for my family. We'll be better off in the long run by changing the bad habit today then wonder why we didn't do anything when we still have a chance. It's not going to be easy and I'm sure I'll be fighting it along the way but it's a journey I want to do for the good of my family. So I educate, learn, purge and maybe when habits change my family will have financial success and as a family we'll be happier human beings then struggling to just survive. Take care, Peace!!