The Economist ~ Work taxes and war

Day 3,788, 07:46 • Published in USA United Kingdom • by Spite313
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Dear friends,

I am writing briefly today to discuss work tax rates. Most countries have a work tax of either two or three percent, with a few countries opting for higher rates. Work tax is calculated as a percentage of the mean wage for the country over the past thirty days. As such it is usually lower than the top salary due to people who work in communes, and of course due to bots.

In my last article I provided a bonus graph of data canvassed from citizens in a number of key economies. From that we established that the “mean” salary in each country varied from the lowest (Slovenia, 212.13cc) to the highest (Poland, 373.67cc). This means that, per point of tax, Polish companies pay around 75% more taxes than Slovenian ones.

With all this properly understood, what level of taxes should a country have? The purpose of taxes is to take a percentage of income (profit) from company owners for national benefit. The purpose of taxes is not to make working undesirable and therefore strangle the economy.

The below graphs illustrate this by showing (at current US market prices) the effect of different levels of work tax on both overall profits (minus taxes) in red, and the amount of tax money sent to the government (in blue). This is calculated at 200% bonuses:



The current war has reduced US weapon bonuses to 25%. Given that, this is the current profitability:



Current US legislation is underway to change the tax rate from 2% to 3%, which will mean going forward Q4 companies based in the US will take home 4.17cc in cash, and the government will take 10.13cc. That’s equivalent to a 70% tax rate, and as WRM prices normalise down towards 5cc this will only get worse. It is also clear that any further tax rises would make working in the unoccupied US impossible.

Below see charts for some other major world economies (at current tax rates, prices and bonus levels)

Romania


Poland


Argentina


Slovenia (included this mainly because of their 8% tax rate)


Shared incomes

If your holding company is not in your citizenship country, the tax output is shared between the two countries. 20% goes to your citizenship country at their tax rate, and 80% goes to the country the holding company is in at their tax rate.

For example I have UK citizenship, and a holding company in Romania. 20% of the UK tax rate (about 1.8cc) and 80% of the Romanian tax rate (around 4.5cc) combines to give me my work tax amount, and these amounts are disbursed between the two countries.

Companies in the occupied USA

By occupying the USA, Croatia has gained 190% weapon bonus. However this bonus is effectively shared by the non-Croatian (and non-American) companies which remain based in Kentucky.

American citizens cannot work as manager in these companies (at present) because during a war, there is a trade embargo in place between the aggressors. Therefore any raise in American work tax would only affect those American companies based in the unoccupied USA, and those based abroad (as discussed in the previous section). There are few of these due to the US having such good bonuses under normal circumstances. This makes the US particularly vulnerable to invasion.

For non-American companies based in Kentucky, work tax rates are currently very low due to Croatia’s 1% tax rate. Since most of the companies based in the US probably belong to citizens of countries opposed to Croatia, they may choose to raise their work tax rate to strangle these businesses.

Moving companies between holding companies is expensive, so as the war continues the inability of Americans to WAM in their companies could result in a dip in production of both WRM and weapons. The first sign of this was the sharp rise in the cost of WRM in the US market this morning.

Conclusion

My conclusion is that this whole topic is fiendishly complicated and my formulas are now going off the screen trying to pull together all the different factors involved. It’s my guess that few, if any, countries actually calculate this sort of information before setting work tax, and just eyeball it. Similarly few, if any, business owners think about work tax in the same way they think about bonuses, but it is clearly just as important. I hope this (rather rushed) article has been enlightening, and I’d be happy to hear your comments below. Please do let me know if I’ve made any obvious mistakes.

Iain



Thank you’s

Thank you to the following citizens who kindly endorsed my last article 🙂

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