[Socialist Revolution] Creating an Economic Powerhouse - Economics Policy
Major Lee Hung
Many in eRepublik will tell you "It's impossible to role-play as X-wing for Y reason!". This can be somewhat true, but sometimes we have to make do with what we have.
One of the most successful economic models, in my mind, is the creation of a socialist economic state. This is a powerful economic hub, which can provide huge opportunity for a small nation like eAustralia in terms of finance.
The emphasis will be made on the following three points:
-Increasing the flow of money IN to Australia, controlling the flow of money OUT of Australia. Encourage the strongest possible method of remuneration for citizens.
-Making eAustralia a global economic competitor.
-Begin to build a reserve for future governments so we can adequately organise the liberation of eAustralia, or begin social programs in the long term.
Building the Ultimate Economic Powerhouse
Tax Policies
Income Tax: 25%.
Reason? This will encourage employees to work in commune-based systems, where they can earn goods in lieu of typical pay. There are two reasons one may wish to do this. Firstly, the influx of weapons encourages people to drop more damage for Australia and the wider NaN. The influx of food and people's abundance of it will encourage them to donate it to new player help schemes.
Secondly, the price of 2 Q7 tanks fetches more than the global average daily salary. Typically, a commune will produce at least five. Some in eAustralia are given 15 Q7 tanks a day, equivalent to over 100CC salary per day.
These tanks can be exported to similar economies, such as eUSA, where the demand is high and the import tax is low. The abundance of tanks will lower the flow of money out of the country, and begin bringing vast amounts of currency in to the country, putting our citizens at an advantage.
VAT: 2%
People will be able to recover earnings they lose to tax by earning a LOT more in terms of a tax reduction from selling their goods. The idea is also to create incentives to push down WRM and tank costs, creating a huge market for foreign exports.
We anticipate that the VAT income per Australian citizen each day will be $1.30. See the next point however on why it won't just be eAustralian citizens feeding our economy.
Import Tax: 1%
Low import tax will encourage people to do business in eAustralia. The eAustralian citizens flooding the market with the goods will increase demand over the next three months of implementation date of this policy.
People will begin to flock to eAustralia to take advantage of the low tank prices. This creates an opportunity for other people from other countries to begin exporting to the eAustralian markets. The goods will then again be exported to foreign citizens - cheap tanks will also benefit our armed forces.
Coupling the VAT & Import tax, we'd make around $0.20 per tank sold. If this policy works according to plan, the tanks and food sold on our markets should mean around 10-20 transactions are made every hour on eAus markets - this will be people buying in bulk to sell for a profit in their own country. This would mean an income of around $90 every hour in eAustralia.
This alone would cover the monthly expense on MPPs.
GDP under the Socialist Revolution - Calculated roughly as a monthly increment if everything goes smoothly.
The Monetary Market
The monetary market is a huge source of income - for those who know how to do it. I intend to raise $1,000,000 initially to play the monetary market. We'll be splitting the operation across 8 different orgs if possible, to make sure we're making as much as possible.
(The raising of money will come from the issuing of government bonds, where people can choose to contribute if they wish. I myself will be putting in at least $100,000 to get things kicked off. More on this will come if we ever run for an election.)
20% will be used on speculation, IF people wish to trust my market predictions. I'm rarely wrong when predicting an increase in gold prices. This is a great way to make short-term gains.
The other 80% will be used to buy up gold at a rate of 200/gold. This means 20 profit per gold over the course of the month.
Only around 50% of the money will be used, with $500,000 being the beginning of our national reserve.
The Budget
If we got in to power or a party in power wished to let us implement this economic model, our monthly budget would look something like this.
Income
Explanations on how I reached these figures below..
-Income Tax: $11,800**
-Domestic markets: $25,000**
-'Exporting': $32,400**
-Monetary Market: $56,000**
TOTAL INCOME: $125,000
Expenditure
-MPPs: $50,000
-Military: $40,000 (More on this coming soon - will be used also as an economic stimulus)
TOTAL: $90,000
Surplus
It's up to future governments to decide what to do with our savings from the duration of our time in power. We however will continue to build on a reserve for as long as is possible, and we'll also continue invest in to the economy to stimulate further growth.
We may choose to re-invest 50% of the surplus in to the economy to stimulate further growth. This will slowly trickle back through the financial system, where we should see 20% of that money back to us, effectively creating a 30% expense. Economic growth would be around 4% a month as a result of this if you take in to account the below factors.
This would be the absolute minimum scenario, and would put us on course for a strong future.
The monetary market has the capability to bring in four times as much - we'll report on this regularly to see how it goes, but I guarantee you we can top up our earnings nicely from it.
The above numbers are BEFORE economic stimulus; I'll provide $30,000 of stimulus a month from my own money which will contribute nicely to taxes.
***EXPLANATIONS OF INCOME***
-Income tax: 200 citizens working every day. 150 of these at $10 an hour. (Taking absolute minimal estimations in to account based on our activity)
-Domestic Markets: 200 active citizens, spending approximately $300 each a month on eAustralia's markets.
-Exporting: 3 foreign-citizen transactions every hour for a month, each being a 'bulk' purchase of cheap tanks, or money earned on tanks exported to eAustralia. This is the absolute minimum and will increase as the program gains popularity. "Rome wasn't built in a day".
-Monetary market:
-Short-term gains: (average return)$3 per gold per week (on total investment of $100,000 worth of gold)
-Long-term gains: $25 per gold per month (on total investment of $400,000 worth of gold)
Long-Term
Every month, our income, as a minimum, will raise by 5% for as long as these policies remain implemented. This means that the surplus will continue to grow in the thousands, as well as our citizen's wealth. A true socialist state will ensure - a true global economic force will result.
The Economic Powerhouse - eAustralia
If we ever get to the point where we're able to implement this, I'll release the little details later on. There will be various schemes, and a lot of re-investment to make sure our economy becomes a true hub.
If enough people want to know the smaller details, please let me know and I'll write the entire policy in the a Google Doc, just hit me up if you want it done. 🙂
Next up will be our military policy, and some ideas I've been discussing recently!
Comments
"Get your snake bite potion imported fresh from a Nigerian Prince"
eAus has survived impressively well considering our present situation. The simple fact is that we suffer ONLY because of being occupied for so long. I would suggest you do actual research and background fact checking before trying to convince the populance you are more versed in this kind of thing than our own Grand Poobah of economics Venja and his side kick PJK who's skill with the books saw us making at our height 2mil a month and see us... what 6 months (or more) after occupation still having funds in the kitty.
The tax policy encourages people to produce their weapons in countries with 10/10 bonuses, and reward their employees the tanks for doing so. (Many TWO countries for example produce thousands of tanks a day thanks to Poland's bonuses) Incentives will be given to assist with this.
The idea isn't to increase our manufacturing capacity, but to increase our market presence. People trading through eAus, selling their tanks abroad etc will all contribute to putting our citizens in the strongest possible financial position.
The monetary market will be the true weight behind the surplus, while tax revenues will meet expenses.
to my understanding all Q7 tank supplies from Aus are already off in 10/10 nations. Don't get me wrong I hope it works for you. I am military minded so I leave numbers to people who have that mindset. IF you want to win a war come to me, if you want to balance a budget go to Venja lol
VOTED!
it sounds good in theory but i wonder how it would work in practice, remember that you can't completely control the market.
a 25% tax on income? are u crazy
Yes.
and id like to see a more complete scheme to weigh the pros and cons
side note, you are assuming that we have enough companies for people to commune in (people that want to let their companies be used for communing anyway)
I can just buy companies; not a problem!
Supply and demand ??
You are forgetting the Demand part. Sure we can have the cheapest Q7, but where are the buyers going to come from. eAustralia is far away from most people. It costs 60 - 100 cc for most people to travel to eAus.
eUSA has about the same tax policy, but VAT is 5% not 2%. Lets use a base rate of 7cc for each Q7. In eUSA price after 5% VAT is 7.35 and eAus after 2% VAT is 7.14. That is a difference of 0.21cc per Q7.
A round trip ticket of 120cc would require a buyer to buy 571.43 Q7 to break even. How many people will be buying more than 572 Q7 at a time?
If tanks are significantly below the global average, demand increases as people buy large amounts to profit.
The general idea is to push prices down; the VAT cut will make sure sellers don't suffer a hit.
Serbia has a 3% VAT. Brazil a 5% VAT. What is significantly below global demand? I think we could get max 2% below market, which would not make up for travel costs.
Venja, Paul J Keating > everyone else.
You may be right, you may be wrong. Good on you for even thinking about the Economic Module V + S