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Finance: What is the Free Rider Problem? 10 Views
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Description:
What is the Free Rider Problem? The free rider problem occurs when people take more than their contributed fair share of a common resource. In the case of public services that are supported by taxpayer dollars, such as schools, medical treatment, and food stamps, those that do not pay any taxes who collect on these services are essentially free riding.
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Transcript
- 00:00
finance a la shmoop. what is the free rider problem? free rider not Easy Rider
- 00:08
but a great film ask your parents about it and go watch it someday.
- 00:11
alright and if there was any confusion this video is not about ebikes either. [kid holds up VHS in a movie rental store]
- 00:16
you know those battery-powered bikes? okay so you're a tax derelict. you hate
- 00:21
paying taxes so much you just don't. but then North Korea sends over a nuke.
Full Transcript
- 00:27
well it's about ten miles off the coast just about to make you glow in the dark
- 00:31
forever, when one of our homing robot defense missiles shoots out the belly of
- 00:36
a nuclear sub, and blows that nuke from North Korea all the smithereen. thank you
- 00:41
very much. so now the country is safe not so much North Korea but that's a
- 00:46
different story. well you didn't want to pay your taxes. [missile flies through the air]
- 00:49
you didn't want to fund that sub or the brave sailors in it or the homing drone
- 00:55
or the myriad other fancy tech things that powered it. you deadbeat tax non
- 01:00
payer that you are, you wanted a free ride. a free ride on everyone else's hard
- 01:06
earned money that they paid taxes on. all right so how do we avoid this problem
- 01:11
like you? well we have the IRS and they have an army of geeks who make sure you
- 01:16
pay your taxes, so you can't just freeride on the rest of our backs. and if
- 01:21
you don't pay your taxes you face serious jail time and we'll have to end
- 01:24
up paying more than if you just fallin in step and pay your taxes on time along [man is thrown in jail.]
- 01:28
with everyone else. got it all right free-rider problem solved.
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