Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Working for the government
Published on September 1, 2004 By Draginol In Politics

Often times I see people describe those who vocally support tax cuts as being "greedy". But it isn't "greed" that drives that generally IMO. It sure isn't for me. It's about labor. The average tax payer works 10 to 12 hours per week for the government. That's quite a bit of "community service". But here's a fact that most people don't realize: Most people who are "rich" work a lot more hours per week - hence work even more hours for the government.

A lot of people who are considered "wealthy" are that way because they work a lot of hours. Personally speaking, I typically work between 10 to 16 hours per day, 5 to 6 days per week.  I've time sheeted it before and the total hours comes out to being between 60 and 75 hours per week depending on how busy things are. Let's say it averages to around 65 hours per week.

To convert this this to a 5 day work week and you have 13 hours each day, 5 days per week. 

So a person like me, working a 13 hour, 5 days per week schedule is working for the government for the first 6 hours each day.  That's 30 hours per week that I spend working for the government. I am almost a full time employee for the government. My "payment" from the government comes in the form of living in a nation that has the infrastructure and created an environment where someone like me, who grew up very poor, could start his own business and become well off.  So I don't begrudge that -- except when people try to argue that I'm not doing enough.  Because I'm not just paying a lot more in raw dollars to the government, I am working a lot more hours for the government -- nearly 3 times as many each week!

Statistically, people who make over $200,000 per year work more than 40 hours per week -- a lot more than 40 hours per week. Contrary to what some people will tell you, ones income is largely tied (directly or indirectly) to how much wealth they create which is a function of their productivity and time. Those at the top end of the scale tend to be people who are both very productive in their wealth generation and work a lot of hours.

According to the department of labor, those making $200,000 per year or more have a mean work week of 59 hours (I wish I had the link handy as it had a lot of other very handy stats in the report). And if you shave off those who earn a substantial part of their money via investments that number would undoubtably go higher.

Needless to say, when you're working 20 to 30 hours per week for the government, you tend to look darkly on those who suggest that a cut of say 3 to 5 hours you spend working for the government as "welfare" or a "giveway".

That's also a reason why people like me get up in arms when someone starts comparing real welfare to things like "corporate welfare". 

Let me illustrate that point with an analogy:

3 neighbors are working 5 hours a day to build a community play ground. One person is sitting on a chair watching us working. They will be using the playground when it's done but they're not helping build it.  One day, they get a note saying that they only have to work 4 hours per day on the playground. At hearing this news, the person who's been sitting on a chair the whole time says "Aha! See, you're no different than I am. That hour you just got off is welfare!"

That sort of thinking rankles me.  When someone argues that a tax cut/tax incentive is really no different than welfare it ticks me off. Because at the end of the day, it's labor we're talking about. One person is doing labor for the community and the other isn't.

You can debate whether that person should be doing more or less labor for the community, but you cannot deny that they are doing labor for the community. By contrast, the welfare recipient (defined as someone who is not paying income taxes but receives financial aid) is not putting in that labor.  And if you want to quibble on that point, I think most people would agree it's absurd for someone who's either not working at all or at best is working an hour or two each week (for the community) to pick too much on the guy who's working 20 to 30 hours per week for the community -- or to try to equate the labor of the two. 

The average # of hours the "working poor" put in each week total is 15 hours. That's total hours. I'm doing 20 to 30 hours each week for the community and then the other 30 to 40 hours for my family. And so are millions and millions of other people.

I am not suggesting that we should eliminate such welfare programs. On the contrary, I strongly support safety nets. The United States is a wealthy nation and the opportunities it provides should make every citizen feel they have a duty to the community to ensure no one goes hungry or lives without shelter.  But at the same time, don't describe a cut in the number of hours I'm working for the government as "welfare".

So next time you see someone complain about "corporate welfare" or demonizing "the rich" or arguing for higher taxes for "the wealthy" remember this - they're not just paying more than others, they are, statistically, working more hours for the community as well.

Comments (Page 2)
on Sep 02, 2004
Wow! I cannot fathom why the republicans are not trumpeting the 4 million net job figure over and over!

Check it out yourself, I gave the website. But if you do listen to many of their speechs, they do say there is Job growth. Unfortunately many news programs don't play a full speech. The Rep. just don't kick and screem about it, thinking if they say it once it don't have to be said over and over and over again. Because if they did, people may think that they are full of S**t and whining.

If you go to the site and can prove me wrong go ahead. It's not going to hurt my feelings.
on Sep 02, 2004
During the time between 2000 and 2004, the population of the United States increased by 12 million. Therefore, the unemployment rate would have gone up.
on Sep 02, 2004
If you want to say lets look at the unemployment rate, but now it is lower then the Average of President Clinton's years.
on Sep 02, 2004
According to those sites, non-farm employment shows a net loss under Bush. Are we becoming an agrarian nation??

Hmm. There are two types of unemployment surveys. The "establishment data" shows a net loss. Household data shows a net gain. I know that most economists, including Greenspan, consider the establishment data (based on payroll surveys) to be much more reliable but there's a pretty big discrepancy between the trends shown by the two here. They do measure different samples (for example, payroll figures don't include the self-employed) but they do track each other. I'm sure there's an explanation for this out there somewhere, if someone (else) feels motivated they can go hunt for this.

On further reflection, maybe it's not so strange. Both show weak or nonexistent growth over four years... it's just a question of whether the statistical noise makes that weak growth happens to land above or below zero.
on Sep 02, 2004
The thing I resent about *targeted* tax cuts is that they undermine free markets.

Government's job should be to ensure fair competition between businesses. If different businesses are paying different tax rates, that's not fair competition. It biases the market toward larger firms, who have more power to negotiate and/or lobby for tax breaks. It means that the most efficient producers won't necessarily be the most profitable. It means that government is picking winners and losers.

Now granted, it's not really that simple. Sometimes government has to actively intervene to *make* competition more fair. If I pollute, it's only fair that I be hit with a pollution tax or fine, to cover the cost to society of my actions. If I make a product which reduces pollution (say, hybrid cars versus regular ones) I should be rewarded, and a tax break is a good way to do that.

But too often, government intervention comes because of political pressure--firms spend money on lobbyists partly because it's a good investment--they expect to their money back in tax breaks and government spending. And sometimes, it simply comes from good people representing their own constituents at the expense of the nation as a whole. Look at Bush's steel tariffs--steel-producing states love them, and arguably (emphasize arguably) it's the job of congressmen from such states to push for those tariffs. But they mean higher steel prices for everyone who uses steel, which means job losses in the auto industry, machining and parts, and most other manufacturers. These cause big net job losses, and hurt the whole economy through higher consumer prices. I've seen estimates that the cost to the economy of each job saved is several hundred thousand dollars.

Maybe you don't like the catch-all term "corporate welfare" for such policies, but I don't know a better one.
on Sep 03, 2004
Lobo: Then you need to provide a source to that data because every study I've shown shows it much closer to nearly half our income ends up going to the government in some form (federal, state, local, property, sales tax).

Now I havent read all the responses but this caught my eye...a real classic. The original article never mentioned one source yet apparently any counter argument is invalid unless it is sourced (now how do you spell hypocrisy.)
on Sep 03, 2004

Draginol has often mentioned sources, this last article was just one of many articles about the same subject. OTOH I would really like to see the sources of some of Lobo's more fascinating statements.
on Sep 03, 2004

Draginol has often mentioned sources, this last article was just one of many articles about the same subject. OTOH I would really like to see the sources of some of Lobo's more fascinating statements.

Which ones? I'm still a student so have access to all sorts of really good economics databases. Let us know what you want to check and I'll have a look for you if you like. Personally I don't have the funds to support a diversified portfolio (I'm not 25 yet), but that's the key to real wealth and income. Working is for wastrels and the poor.
on Sep 03, 2004

what are you talking about?
on Sep 03, 2004
I think he is talking about Modern Portfolio Theory.

Just a guess, I cannot see where diversified porfolios is brought up in the rest of the conversation so I think it might be based on Lobo's assertion of this:

And while you may cast aspersions on my character, background, education, interests, etc, it's painfully clear that I know FAR more about handling money, tax codes, economics, and general finance than you do. You may HAVE more money than me at the moment, but I guarandamntee you that if we started out with the same amount of money, at the end of a year, I'd have far, far more to show for it than you.

If I am right then I think this is in error because nobody who believes in MPT thinks they can beat anyone in the course of a single year. If they did it is just a matter of chance. I am certainly a novice in this matter but MPT underperforms the optimal always...that's how it is designed. But the optimal is a dream so, in my opinion, it is the only way that makes sense.

I think Lobo might be right and he knows more about Brad than handling money, tax codes, economics, and general finance but his proposed challenge is ridiculous.

Of course the reason that he might know more about those things is that Brad has been busy making money.
on Sep 03, 2004
Of course the reason that he might know more about those things is that Brad has been busy making money.

Nice, FreeMark!
on Sep 03, 2004
Actually I meant the statement about capital gains tax having a lower tax rate, thus making shares and real estate a more effective way of earning money than actually working. It doesn't make as much, but more of it is made in the clear.

Personally I think Brad would have a better chance of making money - he is after all a self-made millionaire/billionaire/whatever. Lobo's an obnoxious idiot, but his arguments do make sense - proportionality means that people working 60 hours a week are going to spend a similar proportion of taxes regardless of how much money they make with progressive taxes, and more than the rich with fixed rates.
on Sep 03, 2004
Actually I meant the statement about capital gains tax having a lower tax rate, thus making shares and real estate a more effective way of earning money than actually working. It doesn't make as much, but more of it is made in the clear.

Of course that is currently the case (at least in the US).

Of course using your money to make money is absolutely the way to go. The problem with that is you actually have to have money to do that. For the majority working for salary and investing a portion is the way to eventual wealth.

As to the article I think that a rich person doesn't necessarily work 60 hour work weeks. Brad does because he is building his business and it is very important to him (and I have no idea if he is 'rich'). But, I think he would be prudent to start building his business where he doesn't have to work at all, he just chooses to. I would be surprised if he isn't doing just that.

My belief is the more money you have the more freedom you have to do whatever it is that you want.

on Sep 03, 2004
My feeling is that Brad built his business by the seat of his pants. He had a fair amount of things go his way and more than a few that didn't. What is important is how he rolled with the punches and changed his approaches. There are many places in his story where he could have easily given up and many of us would. But, for whatever reason, he pushed through.

I think that successfull people generally look to leverage their ideas and knowledge in any way they can to produce profitiablity. Looking at this siite and Stardock I think Brad is doing that.

I guess I am saying is that the way Brad's business was built is not a pattern for other's to follow but Brad's determination, effort, and ideas are.

on Sep 03, 2004
Any rich person with even a modicum of money sense will spend about 40 percent of their income on taxable items. There is a myth that the rich spend way more money than the poor. The problem is that it's not nearly as high a percentage of overall income. (BTW, if YOU are spending a significant portion of your salary, then get help. You need to learn how to manage your money.)

I would like to see some stats to back up the claim that rich people (how rich?) actually only spend 40% of their income on taxable items. Just because you think something is stupid doesn't mean people don't do it.

Something to consider is that social security taxes are not the equivalent of income taxes. In theory, Social Security is a retirement program you pay money into so that you get money to live on when you retire. Income taxes provide no such benefit.

In contrast, nearly all lower income families make insignicant income through capital gains (mostly through savings accounts.) Now, a little math lesson, if you are paying a 32% rate on lets say 25% of your income, and 20% on the other 75%, what does that make your total tax burden?23% (based on an assumption of 300,000.00 yearly income earned and unearned)

Ok, let's think about this. If I make 300k a year but only 25% is employment income, that means I made 75k at my job and 225k in investments. Supposing my rate of return on investments was 10% (which iirc is rather good and would probably have to be from a high-risk investment such as stocks), that means I have 2.25 million in my portfolio. My question is, how did I amass a 2.25 million dollar portfolio on my 75k a year salary?