[FR/EN] Follow-up on VAT and government income

Day 1,841, 19:21 • Published in Canada Canada • by SpockPQ
Résumé en français

Je poursuis ici mon analyse des revenus du gouvernement. Bien qu’avant le jour 1793, il ne semblait pas y avoir de lien entre la taxe de vente et les revenus du gouvernement, nous observons récemment une corrélation entre ces deux paramètres. Est-ce que Platon a changé les règles du jeu autour du jour 1793: je crois bien que OUI. Cependant, la récente hausse de la taxe de vente sur les armes de 10% à 15%, soit une hausse relative de 50%, n’a produit qu’une modeste hausse des revenus de 27%, ce qui peut être expliqué par la théorie de Laffer: la vache ne se laissera pas traire si facilement!

Follow-up on VAT and government income

It’s time for an update about my last paper, in which I have made the hypothesis that VAT has no effect on government income.

To analyse the data, I have chosen to plot the cumulative government income free from donations and MPP fees. If you want to analyse the data like me, it’s available here (thanks to Bryan Alexander for its work!). To get the cumulative income, you only have to compute the cumulative sum of column K. In my graphs given below, the slope of the curve corresponds to the daily income. I add linear regressions on some part of the curve to give the value of the daily income for few key moments of the last 100 days. This approach is the best way to filter the day-to-day fluctuations in the government income and give a clear picture of what is happening.



If we zoom a little bit, we obtain :



So, even if my hypothesis seems to be valid before day 1793 (VAT was changed from 3% to 20%, but no significant change in the daily income can been seen), the results obtained after day 1793 show that VAT has a small effect on government income. So, I was partly wrong! Plato seems to have put his hands in game mechanics around this day and now, the economic game is much more interesting (market bots seems to be much less active than before….good thing IMO).

Now, if we look at the results after the last tax increase on day 1838, we can see a slight increase of the government income from 3766 CAD/day to 4796 CAD/day. It’s a 27% increase, but the VAT on weapons has been relatively increased by 50% (10% to 15😵 and the VAT on food has been relatively increased by 150% (10% to 25😵. I think it’s a good example of the Laffer theory. We could summarize it like this: the cow won’t let you milk it as much as you wish. We also see that the new game mechanics gives much lower daily income than before, so we have to adapt our play to this new reality.

Finally, congressmen, do you think these results are satisfactory?