Calculate your share of a billion dollar expenditure

Thursday 9 April 2009 @ 10:34 pm

This article isn’t about Crystal Reports, but instead is for all of you who are doing your taxes this week.  I have a simple exercise you can do while you have your tax forms out.  And then the next time you read about a federal outlay in the billions or trillions, you will be able to calculate your exact share as easily as calculating a tip on a dinner check.

All you need to know is how much your tax bill was for last year.  It doesn’t matter if you got a refund or had to pay in April. What is important is how much tax you had to pay for the entire year.  So pull out your 1040 and look on line 61 for the long form (or line 37 for the short form). This is your ‘total tax’ or your share of our country’s expenses.  Now get out a calculator and divide that total tax number by 2,600, which is roughly how many billions the US spends in a year.   The result is your share of every billion the government spends.

So say Joe’s tax for 2008 was \$16,000 and he divides it by 2,600 to get \$6. We’ll call this number his SOB (Share of a Billion).  The next time he hears about a 100 billion bailout he multiplies 100 times his SOB and knows that his share of that expenditure is \$600.  And what about a trillion dollars?  That means one thousand billions.  So if the Federal Government spends \$1 trillion, Joe’s share is \$6,000. Now Joe can put these expenditures in context.