Objections to the new Tax Policy and Congress candidacy

Day 1,431, 23:11 • Published in USA Greece • by Dodona

Greetings America,

DBC News is back after a looong time and our program today is featuring the New Tax Policy in eUSA.
(I know most of you have no clue about the DBC Network, but I had to write a whatever introductory line).

As most of you must know by now, the US administration has decided to make some significant changes on taxes. Income taxes increase from 15% to 25%, VAT drops from 7% to 5% and Import taxes go to 15%. I must confess that I have missed most of the debate. I did read a few threads on the forum, however, and read a few articles here in the past couple days.
What triggered me to post my thoughts here is an article published by Kemal Ergenekon earlier today. Kemal is not just one of the advocates of the new policy, but also one of the creators of it. Perhaps the main person behind it (correct me if I'm wrong).

Let me first say that I am not against the new policy altogether; on some things I agree. There are some changes, however, that find me in clear disagreement.

Let me second say (is that even an expression? I think not, so I will copyright it), that I do not have a PhD from a top 3 macro Uni, so one might think that I am not qualified enough to comprehend the problem properly, which will lead me to erroneous results, but I do have a Bachelor's degree and that should be sufficient to understand and assess eRep economics. If not I can always play my Master's card.

ok now let's get to business. I'll start from the Income Tax.
The rationale behind the 25% is briefly this: if you're an active player you shouldn't be paying any income taxes, so this change does not affect you directly. If you're not active enough, you will be taxed for the rest of us. 25% is the cap, so 25% it is. If the cap was 50%, you'd probably have to pay that much.

This logic is erroneous to me for two reasons:
1. It is not socially fair.
Consider player A: he is quite active and old(ish) player, works for MW and has several companies where he produces 3,000 worth of wellness and additional raws daily. His daily income? 1-2ks worth. Income tax that he pays? A quarter. Literally.
Now consider player B: he's a relatively new player or what they would call a 2-clicker (I prefer the 20-clicker term myself), works for market wage, doesn't have that many companies and his total income for a day is 500 usd. Income tax that he's paying? 38 usd.
The tax burden falls entirely on the has-not, while the one who has goes income-tax-free. That I consider socially unfair and just present it here for the record. It is not my main "problem", let alone that someone can come with a counter-argument that this is actually fair and we will go nowhere, since this in not an objective but subjective issue.

2. Kemal said that: "labor income is INELASTIC to taxation ... the government can increase the Income Taxes without hurting production or labor supply at all." That is true... but it is not the issue! What matters is that TAXABLE labor income is NOT inelastic to taxation. You may increase tax rates and get less tax revenues due to this. People who would accept to pay the 15% tax may decide that 25% is too much to pay. So they will turn to alternatives. Find a job with MW and donation, look for work abroad or just quit the game. As you sai😛 "are the most prone to leave the game anyway", so yeah, let's give them another reason to do so! :Ρ
Someone should start a movement "Don't pay IT" and let's see then how much revenues there will be from IT.

An important note here: I am not necessarily against high income taxes (even though I find the 25% a few points too high). On the contrary, in an era of continuous income inflation; and by that I mean total income including work-as-manager, I would agree with a 20% income tax for ALL. But that's impossible to enforce, so it becomes irrelevant to this discussion.

My proposal on income tax: Bring it back to 15% or even better to 12%, encourage people to work with market salary for the sake of America and increase MW to a 5th of the market wage. That would be 30 usd with the current market conditions. Before disregarding this last proposal as unacceptable, stupid or whatever, think that it would mean a minimum IT of ~4 usd per person. peanuts.

Up next, Import Taxes.
15% on raws I agree. On weapons I'd like a further decrease, like 10%. I think 15% is still deterring for people to use the market to export to the US, while with 10% is not really, so it would generate more revenues. But I understand the 15% as well, so it's all good.

And let's go to food... Honestly, the only good explanation I can think for this is that you strongly believe that the bot does not pay import taxes. Otherwise this change doesn't make much sense.
Well I can tell you these:
1. The bot buys imported food regularly at a price of about: (domestic bot price)*1.9. I observed it several times today.
2. Import taxes are deposited to the treasury when a normal player buys the food. I spent about 1k usd testing this today. (yeah that means I donated about 500 usd to the treasury :Ρ).
3. Every hour at xx:50 the treasury reserves jump by 3k-4k usd or even more. Which is more than the amount of money the treasury receives during the rest 59' of the hour (late evening and night time).

Are all those money from VAT? I cannot know, but I sincerely doubt it!

Finally, on VAT I have no disagreement, so no point debating it.

To sum it up, I consider the 25% Income Tax too high. Not only I consider it socially unfair, but I expect it to drive more people out of the market salary, which will lead to less revenues than expected. I also disagree with changing the import tax on food, b/c it will have an adverse effect on revenues.
Of course, time will show what the effects of this new tax policy will be, but for some reason I felt that I should voice my opinion and concerns.


Last but not least! Dodona has never served Congress. Well Congress is not missing much due to this really, but Dodona is missing a medal. So... if any Party wants, I would be thankful if they gave me the opportunity to run in these elections, as an independent candidate, in one of our overseas regions.

And that resumes our program for the day.
Thank you for watching and take care y'all.

~Dodona