Just for Fun

The South African Tax System:

Suppose that every evening, 10 men go out for beer and the bill for all ten comes to R100.
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 R1.

The sixth would pay R3.

The seventh would pay R7.

The eighth would pay R12.

The ninth would pay R18.

The tenth man (the richest) would pay R59.

So, that's what they decided to do....... The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said, "Since you are all such good customers, I'm going to reduce the cost of your daily beer by R20".

Drinks for the 10 men would now cost just R80.

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 R20 windfall so that everyone would get his fair share? They realised that R20 divided by six is R3.33. 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 a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

Therefore, the fifth man, like the first four, now paid nothing.

The sixth now paid R2 instead of R3 (33% saving).

The seventh now paid R5 instead of R7 (28% saving).

The eighth now paid R9 instead of R12 (25% saving).

The ninth now paid R14 instead of R18 (22% saving).

The tenth now paid R49 instead of R59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a rand out of the R20 saving," declared the sixth man. He pointed to the tenth man, "but he got R10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a rand too. It's unfair - he got 10 times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get R10 back, when I got only R2? The wealthy always win!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax 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 their 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, labour unions and government ministers, is how our tax system works. The people who pay the highest taxes will naturally 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.

For those who understand, no explanation is needed.

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

Very good

Excellent !!

The raising of taxes goes much deeper than the mere collection of Income Tax.

About a year ago I noticed that I was gradually becoming more and more illiquid. So I rather foolishly sat down and did a relatively accurate 'forensic' evaluation of tax. Fortunately I do not suffer from depression ( how could I? I'm a punter ffs) or I might have shot myself there and then.

It turns out that my business efforts, both direct and indirect, are mopped up by taxes amounting to nearly 75% of the income I generate.

If your response is : You are delusional! then let me detail some of these taxes.

1.) My entire remuneration is fee based so the state earns 14% off my GROSS turnover before I even receive a cent.
2.) My average rate of tax on that income (after VAT) is now 37% so I end up with 63% before a multitude of other taxes are accounted for.
3.) Rates ( a property tax no matter how you excuse it), VAT on virtually EVERY article I purchase, import duties, ad valorem tax etc (all hidden in the purchase price BEFORE VAT.,) account for the rest.
4.) Petrol sucks up another huge percentage when I fill my car/s.
5.) co2 tax on vehicles purchased.
6.) Taxes on fags & booze ( which you can avoid by not drinking or smoking at all).
7.) A variety of licence fees
8.) More VAT on short term insurances.....the list goes on & on. I even pay VAT as part of my Interbet activity.
9.) Capital Gains Tax on items disposed of.
10.) Dividend tax on my paltry investments.

So I am actually a State Employee WITHOUT BENEFITS and have to create my own work. Yet categorised as being 'super wealthy' and almost OFFICIALLY reviled despite being the 'go to' funder of the state!!!! If that was true then I would ask you to 'show me the money I supposedly should have'

The above explains why, despite earning far more (in inflation adjusted terms) than I did 15 years ago, I actually CANNOT AFFORD to continue feeding more than 1 racehorse. I don't expect any sympathy for my situation but it explains why many owners of my type have rapidly disappeared from the sport in the last decade; as deducting horse ownership expenses from income does not have lasting appeal when measured against the very limited 'fun/pleasure' this activity provides. Assuming, of course, that SARS does not try to disqualify them (as happened to me) using the ring fencing ruling.

The good news is that I already have everything I am likely to want or need before I depart this earth. Other than food, a tiny amount of clothing & medical care I can make do indefinitely with my current housing, vehicles etc.

......and here's something to look forward to:

A couple of short years ago the oil price 'spiked' to $155 a barrel. A combination of exchange rate etc., pushed our local price to about R14 per litre.

Since then the price of crude oil declined to a low of about $20 per barrel but has since risen to the current level of $50+ per barrel. Exchange rates have gyrated as well; and not in our favour!

The state has consistently added additional levies as the dollar price declined so today, despite a crude oil price well below the historical ceiling of $155 per barrel, our local price is now as high as it was at the high of $155.

My question is this : What happens if crude oil creeps back to $155 per barrel? By my calculation it will send the local petrol price up to about R42 per litre! To say nothing of what effect that rate would have on items such as food etc.

So we can can probably 'look forward' to filling our 55 litre tanks at a cost of about R2300 a shot in the not too distant future!

At least it will spawn a totally new career opportunity - Stealing petrol from parked cars!