1. Cost of Government day falls on 26th July
http://www.taxpayersalliance.com/home/2011/12/taxpayers-work-26-july-pay-cost-government-2012-days-2007.html
2. Mortgage Freedom Day falls on April 13th 2013
http://www.lloydsbankinggroup.com/media/pdfs/halifax/2013/1304_Mortgage_Freedom_Day.pdf
So, let's add that up:
26th July is 199 days into the calendar year.
13th April is 103 days into the calendar year,
199 plus 103 = 302 days.
302 days / 365 days is 82.74% of the year,
So, we spend 82.74% of the year paying rent and 17.26% of the year paying for everything else needed to survive.
Forbidden Bible Verses — Genesis 38:20-30
5 hours ago
16 comments:
Good one.
Is there an official Rent Freedom Day as well?
This is a bit misleading, because the mortgage repayments on which the "Freedom Day" is based include capital repayments, so quite a big chunk of that 82.74% is not rent, unless you are a tenant.
Mark, yes, look at the Halifax press release.
B, I've looked, RFD is one month later, ta.
B - agreed, but as the Halifax press release also states, and as MW has discovered, RFD is later in the year, so I thought it was fair-ish to set it out as I did. Anyway capital repayments are sort of 'rent' since, what? 2/3rds(?), of a house price is land price.
Too mathematical for my blood.
L, on average, it's "only" half the cost of a house which is land, but that is not the end of the matter.
Let's assume normal 3-bed, build cost £80k, land cost £80k, total £160k and 25 year repayment mortgage @ 5% interest. That's 25 years @ £11,300 repayments.
If you only had to pay for bricks and mortar and could afford to pay £11,300 a year in mortgage repayments @ 5%, you'd be able to pay it off in 9 years.
So 16/25 of your mortgage repayments (capital and interest) relate to [land rent + interest], which is as close to 2/3 as make no difference (which was you original guesstimate).
JH, those figures are approximations.
The point is, if you are working and renting/paying mortgage (and not claiming much as cash welfare payments), the amount of money you have left over for actual living costs is only a fifth of your gross earned income.
I get 2/3 guesstimate from build + land + gross profit. Land + GP = 'rent' since a lot of 'profit' is from land speculation/planning gain etc. Very little 'profit' comes from the actual contstruction. And all that 'profit' is financed. If you see what I mean?
L, I agree. Which ever way you look at it, you end up with 2/3 overall.
MW Right. This is my next topic for the piece I write for the local paper each month. And I'll use your sums if that's OK?
L, please do, I'm a bit wary about using vague terms like "gross profit" because there's a lot of labour that goes into building and maintaining houses and making the bricks and pipes etc.
Would you say that a bricklayer makes a "gross profit" of £25,000 if he spends all year laying bricks and is paid £25,000?
MW. Me to. But it's the concept that needs getting across. My peer group is constantly berated for 'over-charging the client' - and a lot of them do - but, the bulk of my costs are tax (including regulatory imprests) and rent. As it is for me, so it is for the population at large. We can then have the debate about the bricklayers wages.
L, which is why I like to bracket things into:
a) earned income
b) rent, interest, tax, regulatory costs, monopoly profits, market entry fees etc.
There's no clear dividing line.
A bricklayer is almost certainly in a).
An established architect with mates in the planning department who has a lot of employees has income from both sources.
A landowner has income purely from b), and so on.
MW Quite. Me? I suppose that I am a 'rent seeker', although in my defence I do try very hard to provide a genuine service in return which clients seem to value. Aren't you an 'overhead'?
Actually I think of myself as an 'overhead' as well. The regulators et al I bracket as 'parasites'.
L, am I a pure overhead? Yes of course. If we had a sensible tax system, I'd be straight out of a job.
MW. Well, I reckon I'd lose 50% of our reason to be if we had a sensible tax system. But I know that we'd still have a job, and as our tax would be halved we could survive well on half the revenue. It's be a bit of a win win really.
"If we had a sensible tax system, I'd be straight out of a job."
You'd probably be part of the government by then, so you wouldn't mind.
Post a Comment