How Are Tax Dollars Translated into Taxpayer Working Hours? Need Freeper Help

07/21/14 | Chickensoup

[Chickensoup]

Need some help here.

Trying to understand government spending in terms of hours of taxpayer work.

In other words trying to find average taxpayer hours worked to pay taxes, and use it to look at government spending in a different way, hourly cost,

Need help on this.

Money these days is a little numbing.

But every worker knows how long and hard they work for paycheck.

Tax freedom day was April 13 in 2013

Freeper help?

[Chickensoup]

Need some help here.

Trying to understand government spending in terms of hours of taxpayer work.

In other words trying to find average taxpayer hours worked to pay taxes, and use it to look at government spending in a different way, hourly cost,

Need help on this.

Money these days is a little numbing.

But every worker knows how long and hard they work for paycheck.

Tax freedom day was April 13 in 2013

Freeper help?

[Hojczyk]

http://taxfoundation.org/article/tax-freedom-day-2014-april-21-three-days-later-last-year

[PJBankard]

Basicly you are looking for the amount of work hours based on hourly tax rate required to equal the amount of government spending:

(Govt Spending) / ( ((Median Household Income) * (Tax Rate)) / (52 weeks * 40hrs) )

For Example: $1,000,000,000,000 / ( ($55,000) * (33%) / 2080 hrs)

[Chickensoup]

No, I am looking for how many average man hours are in tax spending. In other words if there is a one billion dollar spending bill, how many tax man hours are going into the one billion dollars. In other words, how much slavery in each spending bill.

[Chickensoup]

Would you explain that a little more and give a solution?

[Auntie Mame]

I don’t know if this will help you, but at my office there are four employees, we all get paid about the same. The taxes combined equal almost exactly the take home pay of one employee.

[Chickensoup]

at my office there are four employees, we all get paid about the same. The taxes combined equal almost exactly the take home pay of one employee

__________________

Wow!

[PJBankard]

OK. Simplified, the equation is Total Government Spending divided by Hourly Tax Rate.

First you need to determine the Hourly Tax Rate. For the example, I will use $50,000 as annual income and 25% as the tax rate. So I multiply 25% or .25 into $50,000. This will give you the amount of taxes paid for year, in this case $12,500.

From here, you need to determine the hours worked per year. Assuming the average full time employee is working 40 hrs a week, you would multiple this by 52 (52 weeks per year) to get the number of hours worked per year, 2080 hrs per year (approximately).

Next you can determine the Hourly Tax Rate by taking the taxes paid per year and divide by the hours worked per year, in this scenario $12,500 divided by 2080. This provides you with an hourly tax rate of $6.00 per hour (approximately).

At this point you would divide the total government spending by the hourly tax rate. So if the government spent $1 Trillion you would divide that by $6.00 which will equal the approximate number of labor hours needed to generate the amount spent by the government based on the amount of taxes paid per hour. In the example it would equal 166,666,666,666 2/3rd hrs.

If you know the amount of taxes paid per year you can skip to the hourly tax rate (Taxes per Year divided by work hours per year) and substitute that number in instead of trying to figure it out by tax rate.

Hopefully that makes sense.

[Chickensoup]

Ok I was thinking of how many full time tax hours it would take. In other words. If 108 days a year is the average worked to pay the average taxes how many days of work would it take to pay for a tax issue like say a 10million dollar boondoggle?

[seowulf]

The simplest answer is, since we’re running a deficit, ALL of them.

[PJBankard]

Ok. Same concept. ($10Mill Boondoggle) / (Average Daily Taxes) Where Average Daily Taxes equals yearly taxes divided by average yearly work days (108). So if my taxes are $10,800 per year, the equation should be ($10Mil) / ($10,800 / 108).

[Chickensoup]

Thank you!

[PJBankard]

Not a problem.

[MD Expat in PA]

Are you asking about how many hours the average worker has to work and pay federal withholding taxes from employment (W-2 wages) in order to fund the government in total (and FWIW, there aren’t enough of us working productively nor enough hours in the day in order to do that given that we run at a huge deficit) or are you asking how many hours on average, the average worker has to work and pay federal tax withholding until they reach their personal “break even” point, i.e. the point at which they have had enough withheld from wages in federal tax withholding for the year so far so they don’t owe taxes come April 15th – because they are two very different questions. And while “Tax freedom day” is based on broad averages based on average personal tax liabilities and withholdings, the actual “Tax freedom day” varies greatly from tax payer to tax payer. And this doesn’t take into account other federal revenues like corporate income taxes, capital gains taxes and estate taxes and other government non-wage taxes and fees, tarrifs, etc.

[SisterK]

So 25% is extorted from your paycheck. But, of the remaining money, you pay sales tax, property tax, death tax, life tax, truck tax, tax on every cotton picking thing you do...An accountant figured it out for me about 9 years ago, and of every dollar you earned, well over 60% went to some tax or another.

[SisterK]

That makes no sense. No sense whatsoever. It would make more sense to work under the table. :)

[Chickensoup]

What I had asked, is this. Taxes are a form of slavery. When Percy the Government Drone wants to pass a bill that will cost 10 million dollars,

Each taxpayer through taxes works X number of hours as a slave to the state. how many slave hours of taxpayer work will it cost? On average.

[Mycroft Holmes]

The simplest answer is, since we’re running a deficit, ALL of them.

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[Chickensoup]

Yes but I would like to put the tax slavery in a per hour format.