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To: PJBankard

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


5 posted on 07/21/2014 6:30:53 PM PDT by Chickensoup (Leftist totalitarian fascism is on the move.)
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To: Chickensoup
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.
8 posted on 07/21/2014 7:01:58 PM PDT by PJBankard (You can't fix stupid.)
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