Upsetting the Balance of Power

Day 2,570, 23:01 • Published in Canada Canada • by Natster

I really think the opposition I received was a mere protectionism act.
I have meted my proposal down a bit from my prior article and had decided to focus on just one proposal. The initial proposal was too much of the elephant apparently.

Anyways, the main reason the initial proposal was rejected was because a lot of the senate believed that the changes I was proposing was too drastic and would negatively impact the economy. They were about revenues.

Some of the arguments presented were reasonable, and some were outlandish. I would like to thank Thedillpickl for dialoguing with me, even though I tend to be stubborn.

I would also like to thank Oinyo for his support of my proposal.

So, I modified in our forums the proposal. I elected just to go for the part of raising the import tax. This would mean raising it from 1% - 3%.
A modest increase to be sure, and still competitive with other nations.

So, to prove a point. I will break down how import taxes work.

I will use a q7 @ $5 as reference point for my calculations (I know they sell for more, but am making math easy).

I have the ability to sell my tanks on 3 markets right now.
They are : Ireland, USA, and Canada

FIRST ECanada
Canadian Tax Rates (Scroll to the bottom after clicking this link)
We have a 1% VAT
If I sell on Canadian Market, I pay 0.0495 CAD or .99%
I love erep calculations, but that's what it says when you go to sell an item on the market. If you have a q7, go to where you would sell it in your inventory and the tax paid shows below your price/unit field.

SECOND EIreland
Ireland Tax Rates (Scroll to the bottom after clicking this link)
Work Tax 1%
Import Tax 45%
VAT TAX 3%
Next, if I sell on the Irish Market, I pay $1.6216 per tank or 32.43%
There must be some cap in play.

THIRD EUSA
USA Tax Rates (Scroll to the bottom after clicking this link)
Weapons Tax is as follows:
Work Tax 12%
Import Tax 1%
VAT TAX 5%
If I sell on the EUSA market, I pay $0.2830 per tank or 5.66%

As we can see, taxes don't stack like we think. There's a game engine flaw.
Now to reveal the protectionism in play -- Looking at current lowest sellers.
http://www.erepublik.com/en/citizen/profile/1978589 - Canuck
http://www.erepublik.com/en/citizen/profile/1296120 - ROLO T. - Citizen of Greece?
http://www.erepublik.com/en/citizen/profile/5792399 - A Canuck

http://www.erepublik.com/en/citizen/profile/2289011 - A Russian

http://www.erepublik.com/en/citizen/profile/5531292 - an American

http://www.erepublik.com/en/citizen/profile/1534660 - Serbian

http://www.erepublik.com/en/citizen/profile/1447347 - Cannuck

http://www.erepublik.com/en/citizen/profile/1915519 - Polish

http://www.erepublik.com/en/citizen/profile/4779316 - another Cannuck

http://www.erepublik.com/en/citizen/profile/1219023 - Another Cannuck

Canadian Market Price : $5.40 (q7 Tank)
Here are the countries VAT Taxes that are currently importing:


Greece - VAT 2% - Current Market Price : $5.68
Russia - VAT 2% - Current Market Price : $5.46
Poland - VAT 1% - Current Market Price : $5.47
Serbia - VAT 3% - Current Market Price : $5.63

Price Differential
Greece - 0.28 cents or 5.6%
Russia - 0.06 cents or 1.2%
Poland - 0.07 cents or 1.4%
Serbia - 0.23 cents or 4.6%

A Raise to 3% VAT would only eliminate with our current economy Russia an Poland as competitors (This only 2 spots out of 10 on our market). This would only move our overall price up by a penny or 2. (5.41 - 5.42). While also keeping us at or near the lowest tank price overall (for people who buy tanks).

Now, we can be strategic with our CO's.
DIV 1 fighters, sorry we have to cut you out. It's better for you to get to div 2 just through working and training.
25,000 dam should be the target @ 10 = 250,000 per q7 tank.
A q7 tank costs 5.50 (keeping math easy again).
Our co's are set at 1M or for this calculation 4 tanks.
So, anyone with a q7 damage can make a bit of money from just buying tanks. if their damage is at least 25,000 on one hit. You can get 10 hits with a single q7 tank or 250k damage. 4 tanks will give you 1 million damage.
5.50*4 = $22 would be your cost for $25 CO.

That should be the target CO. Make it $25, and a lot of Cannucks can be happy.
I'm with some that going $40-50 is wasteful (my slaps can buy a q7 tank at that rate).
Especially, because I can drop 2.5 million damage in one hit if I wanted. Yep, that's right.
So now, that's 100cc's yippee! for a cool 2.5. Or I can use 12 q7 tanks for the same amount.

Anywho, I try to buy my tanks strictly from Canadians when I can. Most of the time, I'm communing them away. I want the people who need to sell them make money and as much as they can.

I was going to do another article that focuses on TAXES, but that will have to wait for now.
We could always do it the Mexican way....
NOT!

On a closing note : Let me do a revenue break down of some of the countries I have mentioned in this article.
Mexico -
1,385 active citizens.
Average revenue : 3780
Revenue per citizen : 2.73

Greece
2733 active citizens
Average Revenue : 64368
Revenue Per Citizen : 23.55

Russia
2032 active Citizens
Average Revenue : 9539
Revenue Per Citizen : 7.95

Poland
5550 Active Citizens
Average Revenue : 975102
Revenue Per Citizen : 175.69
-- Interesting note here, their tax rate is within the lines that I had proposed. However, their minimum is higher.


So, at the end of it all, even though my import tax will get voted down, I will do another proposal that will challenge all who opposed it saying it would cost us revenue. If you are really about revenues, than after all this, I think I clearly demonstrate us approving these three arguments:
1) Raise Minimum wage to $3
2) Lower Work Tax to 4%
3) Raise Housing VAT to 2%

How this will impact:

5% of 33.92 (average wage) currently gives us $1.696 per work
4% of 33.92 (average wage) would gives us $1.36 per work

All Commune workers would move from $1 to $3
Current Work Tax would have them may .05 @ $1 or .15 @ $3
Proposed Work Tax Would give reduce this to .12 @ $3 (still over double the revenue per work)
Our average wage would get bumped up a bit. So these numbers are going to get skewed upwards.

The housing VAT would help offset losses.
$263.40 rough price estimate for you. (q1 homes) Psst, for buyers out there at a price of $264, all you have to do is make $38 per day to break even (and take a little bit of profit). q2 + q3 have to be done differently to be profitable, but q3 barely hits my quadrant. Anything above that, as far as I can tell is a gregarious waste of money.
1 % = 2.634 per home
2 % = 5.268 per home

So, I could see these senators who opposed my previous proposal of not seeing the increase of revenue to our countries coffers, here's a clear strategy. I can see them voting down proposal number 2, but definitely not Proposal number 1, and maybe proposal #3, because of this even market. People are interesting, and even in a zero sum economy, there's always an imbalance. It's how you play it that makes you rich.

Anyways, I will restate, and will allow until monday for debate for bringing this to vote again.
1) Raise Minimum wage to $3
2) Lower Work Tax to 4%
3) Raise Housing VAT to 2%

Each one is a separate proposal, and I see the first one getting rejected by some commune leaders, but ultimately, Co's can turn this into a profitable venture for all.

Stay Cannuckian.