Servitude Year Cost

One of the things that makes me angry on a daily basis is not just the size of our official national debt and official total indebtedness but also the apparent indifference shown by most to it. I used to think that it was because they didn’t care that the state has committed them and their children (and grandchildren) to a life of state servitude to pay off this debt that continues to increase in record amounts. 

However, of late, I’ve come to realise that this is often down to a general innumeracy of the figures involved and an inability to relate it to the level of their labour required to service it. So I’d like to introduce a simple device that we can use to measure the profligacy: the Servitude Year Cost

Servitude Year Cost

The Servitude Year Cost measures the cost in years of labour necessary for an income taxpayer on median wage to pay for any given state expenditure. In other words, how many years people will be forced to work to pay for state waste spending. It's simple:

1 Servitude Year Cost = £5,800 per taxpayer

It’s easy to apply and allows a clear narrative to translate the ethereal figures into the tangible, physical work that it takes each of use to achieve it.  So for example:

2,241 working servitude years were saved by the £13m cut to Bookstart (i.e. £13m/5800) or;

Over 4 MILLION working years were committed (to servitude) to pay off just one month’s Public Sector Borrowing (£23.3bn/5,800). That’s over 4 million people working for one year to pay off just November’s profligacy borrowing.

Both those examples are easy to understand and relate to.

Lifetime Servitude Cost

Additionally, the Lifetime Servitude Cost measures how many working lifetimes (of 45 years) are necessary for a median income taxpayer to pay for state spending:

Lifetime (45 years) Servitude Cost = £261,000 per taxpayer

Using the previous examples, the Bookstart cuts have saved the requirement for 50 people’s entire working lives to be committed to servicing this scheme. Contrast that, with over 89,000 people needing to give all the income tax that they will ever earn to the state over their entire working life just to pay ONE MONTH’S PSB.

National Debt

The official national debt (measuring what is already owed) is £1 trillion whilst the official indebtedness (measuring what our future liabilities currently are) is £4 trillion. That means under our new measures:

£1 trillion = 3.8 million people working their entire lives in servitude to the state’s debt OR 172 million individual years required from the working man to serve the profligacy.

£4 trillion = 15.3 million people working their entire lives in servitude OR 690 million individual years required.

When put in these terms, people get angry, quickly. (Another method is the build cost of a super-hospital at £500m - i.e. November's PSB could have built 46 super-hospitals...).

I’ve tried not to go into too much detail or take it too far. However, I hope this is of use – especially to other bloggers, who can easily link to avoid the repeating the reasoning herein – to help quantify how much and how long the state is committing us to tax servitude for.

Cheers,

FAV.

P.S. Feedback especially welcomed as I hope to develop the above into something useful if it isn’t so already!

H/T: I think Tim or BoM or possible OH had the original peasants’ tax inspiration some time ago. Happy to provide appropriate link if anyone has it (I couldn't find it...).

Big Numbers - a quick reference:

1bn = 1,000 million /  1tr = 1,000 billion
1m = 6 zeros / 1bn = 9 zeros / 1tr = 12 zeros

1m = 1,000,000 / 1bn = 1,000,000,000 / 1tr = 1,000,000,000,000

Workings
1. A calendar year is 52.5 weeks

2. Figures from National Statistics Online, 2010 Survey of Hours & Earnings.

3. Assumes that the taxpayer doesn’t use ANY public service during the period.

4. Used median private sector wage (£473 p.w.) to calculate median salary (£24,832.50)

5. To allow for #3 above, the higher median public sector wage (£554 p.w.) is not included.

6. Actual median salary results (#4 above) contributes £5,774.43 p.a . – calculated here & rounded
7. Does not consider tax on spending post income tax deductions (e.g. VAT)

8. Assumes income tax payer is under 65 and doesn’t have a student loan.
9. Lifetime cost assumes a uniform paying of tax over one's working life based on the £5,800 figure