Suppose that every day, ten men go out
for burgers 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 ate every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily burgers by $20". Burgers for the ten men would 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 eat for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by
Read more: THE TAX SYSTEM EXPLAINED IN BURGERS