Why a 15/1/1 tax would suck.

Day 1,123, 10:52 • Published in New Zealand United Kingdom • by Gibraltar Holdings


Tom and Daniel are both Skill 7 workers who with 90 health everyday.

Tom works at 'Kiwi grain' company at the markets highest wage of 25NZD per day.
He produces 193units for just shy of 0.13NZD per unit which sells at 0.15NZD and takes home 21.75NZD a day.

Daniel works at the 'Basic Q1 food' company for the same listed wage as Tom.
He produces 57units for a cost of 1.34NZD which sells for 1.44NZD(before tax) and he takes home 21.25NZD due to a higher income tax level.

Kiwi Grain makes 3.86NZD off Tom's work
'Basic Q1 food' makes 5.7NZD from Daniel


Suddenly the tax rates are lowered to 15/1/1!

4 Q1 companies from Indonesia, Turkey, Poland and the USA take note that their goods that previously would of retailed for 1.57NZD, 1.6NZD, 1.55NZD and 1.59NZD under the old tariff can now sell for 1.19, 1.25, 1.2 and 1.23.

'Basic Q1 food' is now undercut but being a canny CEO he realises he can reduce his RM costs by starting up a grain affiliate and making his own grain for 0.13NZD.

Unfortunatly he realises that Daniel is still only able to produce food for 1.21NZD (1.22NZD after tax) - The Indonesian and Polish companies are still undercutting him and in a small market...his stock won't shift.

He therefore cuts Daniels wage to 22NZD to try compete until Tom mentions that he earns 25NZD at 'Kiwi Grain'. Daniel checks the job market, realises he can earn more and resigns.

With no workers willing to work for less then they could get in the RM sector - 'Basic Q1 food' closes down followed by;

http://economy.erepublik.com/en/company/skylark-bread1/247283
http://economy.erepublik.com/en/company/d-cba-kaja1/248455
http://economy.erepublik.com/en/company/burger-kinki/247737
http://economy.erepublik.com/en/company/miscellaneous-food/247408
http://economy.erepublik.com/en/company/enz-food/247346
http://economy.erepublik.com/en/company/yum-food/256528
http://economy.erepublik.com/en/company/chobani-food/254162
http://economy.erepublik.com/en/company/vaayu-food/253359
http://economy.erepublik.com/en/company/panes-la-fra/248960
http://economy.erepublik.com/en/company/pamela-anderson-bread/250006
http://economy.erepublik.com/en/company/liquid-food/248209
http://economy.erepublik.com/en/company/shin-sekai-shokuhin/249313[/url
http://economy.erepublik.com/en/company/sn-lamb1/247312[/url
http://economy.erepublik.com/en/company/sk-prva-srpska-pekara/247309


There total production is taken over by as little as 4 foreign companies whose vast labour markets makes them ultra-productive. The loss of native food production also means the loss of demand for 14,500units of Grain on an already oversupplied market!

'Kiwi Grain' suddenly finds that its stock is not selling and makes the fatal mistake of cutting wages (with the same results as

'basic Q1 food' had - Tom and Daniel switch over to Iron) when the only thing that could save the business is selling the cheap grain overseas....an export license.

Many other Grain companies fall into the same trap and those without a pre-exsisting license are faced with closure;

http://economy.erepublik.com/en/company/grand-grain1/247409
http://economy.erepublik.com/en/company/fra-grain1/248959
http://economy.erepublik.com/en/company/dream-grain-auckland1/248316
http://economy.erepublik.com/en/company/phl-grain/249958
http://economy.erepublik.com/en/company/brutus-grain1/247395
http://economy.erepublik.com/en/company/r0oger-s-grain-company1/254980
http://economy.erepublik.com/en/company/grain-relax1/255632
http://economy.erepublik.com/en/company/golden-agrinio-grain/251416
http://economy.erepublik.com/en/company/auckland-elephant-grain/252542
http://economy.erepublik.com/en/company/spectro-s-grain-90-1/256094
http://economy.erepublik.com/en/company/vaayu-grain/248849
http://economy.erepublik.com/en/company/subak-international-ltd1/255035
http://economy.erepublik.com/en/company/bf-grain1-nzl1/252958
http://economy.erepublik.com/en/company/h-c-grain/247291
http://economy.erepublik.com/en/company/a-kiwi-grain-company/251799
http://economy.erepublik.com/en/company/hotel-paradis-des-kanards1/258179
http://economy.erepublik.com/en/company/nz-grain-1-95-/247385
http://economy.erepublik.com/en/company/bag-end-silos-94-1/247530
http://economy.erepublik.com/en/company/grainnewzealand1/247392
http://economy.erepublik.com/en/company/ois-new-zealand-grain/249171
http://economy.erepublik.com/en/company/sn-grain1/247375
http://economy.erepublik.com/en/company/sk-prva-srpska-pekara/247304
http://economy.erepublik.com/en/company/terra-prosper/251229

Fortunatly enough Grain companies survive through good managment to suck up the remaining labour in conjunction with the Iron sector but eNew Zealand is now bereft of manufactured goods and the ability to control their own prices, exchange rate and the constant fear of famine is upon the nation.



Mind how you drive!