Beer, Tax Cuts and Fairness

Sent this into a newspaper that will be screaming about unfair tax cuts tomorrow. Let’s see if they publish it. UPDATE… They did (it’s near the bottom of the page – https://www.canberratimes.com.au/national/act/roos-are-a-capital-asset-20180509-p4zecz.html)

Five men decided to split the $100 beer tab based what they earn (one in each 20% grouping based on income) and on the Aussie tax system.

That meant the first paid $0, the second paid $2, the third and fourth paid $14 each, and the fourth paid $70.

The bar owner gave them a $20 refund and based it on what they had paid already.

Therefore, the first got no refund, the second got 40 cents, the third and fourth got $2.4 and the fifth got just under $15.

The media ran headline saying how the refund was inappropriately skewed to the rich and how the refund should be split $4 each. Which is the fairest way to split a refund of this beer tab… or a tax reduction?

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
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