The Tax System, Explained in Beer! By Johnston Grocke

A complex Tax system made simple, by explaining it in a way that everyone understands! Author Unknown. Video copyright to Johnston Grocke

[henrydecker]

This should be taught in high school before anyone enter the workforce

[vukknezevic]

9 men could just beat up the bar owner after figuring out they can't pay the bill.

[LawyerCalhoun]

I think that almost all of the USA commenters failed to notice that JohnstonGrocke is an Australian accounting firm. So when the video narrator discusses "our tax system", he is referring to the Australian system.


An income tax is not a sales tax or a poll tax. Rather, it is a tax on income. So, the more you make, the more you are taxed.

[almisami]

The richest man would just walk out and say "sue me"

[bryanlee]

Imagine the 4 free loaders asking to be paid to drink 😂

[timratcliffe]

This should be revised to show that many persons who pay no taxes get "refunds" via credts such as the Earned Income Tax Credit and the Child Tax Credit.

[TC-eoeb]

I once worked in a factory that was a union shop. The factory workers ranged from unskilled workers to highly skilled workers i.e tool and die makers. We had union negotiations with the company for new contracts every two years. Every contract time there was disagreement between the unskilled workers and the skilled workers. The unskilled workers wanted an across the board pay raise and the skilled workers wanted a percentage pay raise. The unskilled workers thought a percentage raise favored the skilled workers because 2% of tool and die maker wage was more than 2% of unskilled workers wage. The skilled workers knew that multiple years of across the board raises would close the gap between unskilled wages and skilled wages. The unskilled workers believed it was greed for skilled workers to receive a larger pay increase by using a percentage raise while the skilled workers believed it was greed on the unskilled workers to receive a larger pay increase by giving everyone an across the board pay increase. Even though a percentage raise benefited everyone, the unskilled workers just couldn't stand to see the skilled workers receive a larger pay raise by using percentage. So two year contracts usually offered one year of across the board raises followed by the second year receiving percentage raise. Crazy.

[scottm]

AWESOME! This should be played round the clock on National Television.

[michaelkeefer]

Actually, the richest guy with our current tax system would likely pay a lower percentage than any of the others that are currently paying for the drinks. Remember Warren Buffet's comment that his secretary paid a higher rate than he does?

[KeithStill-pk]

The video doesn't reveal that the rich guy got his money by renting out the houses that he inherited from his Dad. He also owned the brewery that made the beer and the hotel they drank in.

His accountant found a way to write off all his beer expenses as business costs; the profits from his rental houses went into a family trust so he paid little to no tax to the government; he’d also stashed $10, 000, 000 into his super account to avoid more tax; and when he left the group to go overseas he put up the rent of his houses significantly above the market price, as there happened to be a lack of housing at the time.

Did I tell you that all the other men in the group were his tenants?

Sadly, the reality is that in our world the gap between the rich and poor just gets wider and wider!

[sarahclark]

What a brilliant explanation, has Mr Sanders been sent a link to this video?

[chrisnjolliffe]

Watch the video on the "wealth distribution in America" after this.

[reynaldojohnson]

Now explain what Warren Buffet meant by saying he pays less in taxes than his secretary

[steve]

Reminds me that France enacted a "Millionaires Tax" a few years ago. So Millionaires left (and I think France rescinded the tax!)

[johnDoe-gsbr]

You told the story of germany up to this day - amazing, I had no idea that complicated stories could be told so easy - great job !

[allanchinhtc]

Happening in Australia right now with the media attacking the Stage 3 tax cut. Currently it is a massive disincentive to work harder / get a side hustle as most of it goes to taxes anyway.

[spuriouseffect]

And the wealth distribution of those 10 men would be as follows. The first man would have 5 beers, the next two would have 2 a piece, and the other 7 men would get to share a beer.

[Cknight]

I've looked through a few replies here and from similar videos. I've read a few books and articles on the ideas presented. The notions that keep flying into my head revolve around how our (USA) society sees the issue. On an individual basis, we see it from an angle that another individual couldn't fathom seeing it from, and the other person can't fathom you seeing it from your angle. I came across a post of someone who didn't believe in the social good, and that certainly forced me to pause because that's the supposed driving force behind taxes. They're used to pay for schools, roads, buildings, social projects, etc. And along the way through the sheer nature of management, the funds get chopped away as they make it (or don't) to their intended targets. I think those views are fair, but society seems to understand that whether it likes it or not it must operate in accordance to the social good (or at least appear to do so).

So, I think a decent way of thinking about the situation is as a subscription service - The American Subscription. If you stay here, you're subscribed no matter what - whether you like it or not. Now, there are things you can do to keep your subscription and make it significantly cheaper, but that's temporary and will pretty much always be temporary. I see posts of people talking about how they contributed in the past significantly and think that it entitles them to passes in the future. But, whether you pay for the whole website to be professionally redesigned or decide to pay for a year's worth of America at $4.99 a month, you're only getting one bonus year. That is to say, your contribution - no matter how grandiose or insignificant will only service you temporarily and even then only to a degree. And while there's no way to prove this, I'm fairly sure that even if you personally payed for 10 year's worth of maintenance on every American road, you'd still have to pay your property taxes.
Sure, maybe it's unfair that you have a subscription you didn't ask for and don't have the ability to change, but I'm fairly sure the slow seal thought it was unfair the shark didn't go after the faster - less meatier seal, too.

And, I think that's what leads to this natural sense of fairness, "When we put a lot of work into something, we expect something out." Which, when I think about it, makes partial to perfect sense as to why the labor aspect of communism failed.

"Whether I make 20 tank parts or 2, I'm getting the same amount of bread and water today."

Now, that's not saying capitalism isn't flawed. But, I do believe that it staves off the psychological aspect of unfairness. When there's a rich guy, it's expected that he did something shady to get his wealth, his family got it for him, or he worked hard and smart for it. The underlying notion being that he did something "better" than anyone else to get his current status, even if all he did "better" than someone else...was being born. (Go back to the seals...)

The overall points of this post being:
People are astronomically different and will continue to be. Your contributions will provide something for a time, but you'll still need to keep paying into the system - no matter what...like...ever (Even when you die...you pay taxes) A fair system cannot be contrived. Equal? Sure, but not fair.

And as far as the last guy leaving to go to Europe, what are the other 9 guys supposed to do about that? He could have made that choice at any time, so at any point in time he could have completely f'd them over. However, I do agree that it's not the best idea to expedite your own demise. But, I think it's something worth noting at another point in time that someone can basically get behind you and say, "Spread 'um", and those cheeks part like Moses just strolled up to the Red Sea.

[flamecranium]

Which is exactly why se need less regulations on U.S. goods. Foreign made crap is ridiculous

[numbrenine]

clever storty but when did the gvnmt reduce the cost of living by 20%?