Separating fact from fiction: The CTPA and you.
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by Ananias
A short while ago I had the pleasure of reading an article in the American Free Press, which to be fair I want to provide to you here: http://www.erepublik.com/en/article/congress-and-taxes-or-wtf-part-i--720120/1 not because it is factual but because there are two sides to every story. Even though I am convinced that the information contained is both misleading and profoundly ill-informed, I think it is important to understand the lengths to which opponents of progress and a strong America will go to revel in their hubris.
I share the same political party with Moishe, and respect him greatly in many other matters, however, in the debate about the CTPA (The Comprehensive Tax Policy Act) I am convinced that he is wrong.
In Moishe’s article, he provides a top ten list of nations and then proceeds to detail, in length, the tax rates currently in place for those countries, as though the top ten list is the authoritative list of successful vs non-successful nations. He begins by extolling the virtues of Romania, and then Spain. He gives a passing nod to the United States and then goes on a rampage about the virtues of Indonesia, Sweden, Italy and Iran’s tax policy. Then he arrives at the United Kingdom, who’s taxes we most closely emulate, and then makes the statement:
“Theirs is set at 10% - the target assumed by eUSA Congress persons. Has anyone consulted with British congress persons to query as to the results of this action? Nothing has been revealed in the forums to this end. You are reading and posting in the Congressional forums, right?”
I will return to this statement in a few paragraphs.
He ends his list discussing the excellence of Brazil’s and Finland’s tax rates in comparison with others.
One of the most interesting omissions from his article is the admission that these nations are ranked by experience, not quality of life or unemployment or GDP or Imports or Exports. They are ranked my combined experience points, not even average experience points. So take the rank listing for what it is, an attempt to mislead you into believing that, qualitatively, Romania…Spain…Indonesia…Sweden…I taly….Iran…Brazil…Finland are superior to the eUSA because of their income tax rate.
With all due respect Moishe (and the rest of the opponents of the CTPA that concurred with his assessment in the article)…I am convinced that the eUSA is, qualitatively, the greatest nation in eRepublik…I am sorry that you do not share that conviction.
Now, to the point made in the article about asking Britain questions, the most stagger omission of the article is one that has beset tax policies in the eUSA for far to long, that being, while he quotes…extensively…income tax rates from all over the world, the article presents no hard numbers to evidence that somehow…qualitatively…the eUSA will suffer in the all important rankings; the article has no hard numbers or evidence to support the claims that the eUSA standard of living will suffer from a change in the tax structure…
The article has conjecture and bias…and fear…and yet never acknowledges that the American tax structure is already very, very close to the uniform tax policy being proposed with the CTPA. Let’s look at the facts:
At the outset, 8 out of 12 of the existing industry Income Taxes were already at 10%, the other 4 were at 7%. It is important to note that these rates are already higher than the income tax rates that the articles extols as being qualitatively better than the United States. The article bewails the 3% increase, but cannot provide any evidence whatsoever that the 3% will adversely affect anything…because to the opponents of the CTPA, it is the idea of any tax increase that needs to be fought the actual hard numbers are not important enough to research.
So, let me explain to you why, contrary to the conviction of the opponents of the CTPA, America is qualitatively better because of our tax structure and your congressional representation which supports it using facts rather than fear mongering (and I will use a couple of examples from the article’s same misleading rankings).
The article states:
“Indonesia (#4) has an income tax of 1%. 1%! In everything except moving tickets and housing which are 5% (still less than eUSA politicians are after.) They also have a 0% income tax in wood and defense systems. How can they survive? Simple. It is proven in RL that lower taxes sparks the economy. And yet our Congress wants to increase income tax across the board?”
“Simple. It is proven in RL that lower taxes sparks the economy.”
Really?
Show me the numbers, anyone watching the effects of the RL Tax Cuts of our RL President, or the effect of the RL Financial Crisis brought on by the same RL Individuals that received those RL Tax Cuts, on their RL 401k might beg to differ.
But then this is not RL, this is eRepublik. So what does the qualitatively inferior eUSA (according to the theme of the article) have to show for these staggering taxes as compared to the far superior Indonesia (according to the them of the article.
Well lets do some research and consider the facts:
The eUSA has 51 regions, of which 29 are border regions, 23 of which have hospitals, 15 have defense systems.
eIndonesia has 18 regions, of which 8 are border regions, 6 of which have hospitals, 3 of which have defense systems.
Perhaps we should review eRomania and eSpain, the two countries identified as clearly superior to the eUSA (according to the article) as well.
eRomania has 37 regions (mush closer to the eUSA region), of which 17 are border regions, 6 of which have hospitals, 2 of which have defense systems.
eSpain has has 18 regions, of which 11 are border regions, 10 of which have hospitals (almost exclusively Q1), 2 of which have defense systems.
Are we starting to get the picture? The fact is that your tax dollars are being used to support our military and defend our borders.
Now, to conclude this entry, I want to comment on another quote from the article:
“Brazil (#9) comes at an opportune moment. Their taxation is in almost direct opposition to Britain. While Britain has an across the board 10%, Brazil almost has an across the board 1%. A vast difference! The few exceptions are grain and hospital at 5% and oil and wood at 3%. Still, quite a disparity from one country to the next.”
So, an assumption that can be made from the half-truths of the article is that Brazil’s economy is booming.
To this I respond with another ranking category that Brazil dominates: Imports. And second and third? Indonesia and Spain. (For the record Romania is 13. The eUSA and Britain, with their staggeringly high income taxes according to the article are 21 and 22 respectively).
That means that taxes do not appear to significantly increase dependence upon foreign goods, but they appear to significantly impact the safety of our borders and the wellness (and welfare) of our military and citizens.
So when it comes to quality of elife I choose eUSA, as an eUS citizen I am certain you would agree, so it comes as a surprise to me that the opponents of the CTPA do not feel the same way.
From what I understand, the article listed above was a part 1, so I guess if they maintain reporting fiction over fact, this will be part 1 of the rebuttal as well.
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This contains some interesting information that I haven't seen before. I hadn't yet put two and two together re: the ranking system for countries. So thanks, Ananias.
Before I could personally make a decision on this, though I am not yet in Congress, I'd have to see what the gov't is spending on weekly and monthly, especially now that military pay is gone. DS and Hospitals are one-time purchases so they can't be costing us /that/ much.
Some questions that still remain: What is our current /average/ tax rate? How much of an increase will an across-the-board (average) rate of 10% be? What will this money be spent on? Those are the three key questions that haven't been answered. Jewitt is a great person, but his motivation in this seems to be the pleasing simplicity of an across-the-board tax rate. Nothing wrong with that, but what are the practical consequences of such a change?
Answer those questions, and I'll see that as an excellent defense of the proposal.
@HistoryInAction: 10% would be about a 5 to 7% increase in income tax in most areas. The big problem is that nobody is being told just where this money is going. We're just told be certain people in Congress that the government needs more money and that we therefore have to tax people higher. Yet for some reason the import tax that foreign companies pay is being lowered by as much as 70% in some cases.
@NeilP99 - Thank you for the comment. Note my comment in Moishe's article which states pretty much the same thing that you said about my article.
I do respect Moishe, and I do respect you, however you may disagree with those statements. The level of hyperbole in my article may be consistent with Moishe's, but at least I am trying to present as many facts as possible rather than conjecture.
Shall I take some of the more inflammatory quotes from the article and repost them as well?
Moishe chose to attack, unyieldingly, a compromise plan that included several individuals that are to be just as respected for their viewpoint as him. Yet, he generalizes everyone that supports the bill as sticking it to the eMericans.
The decision was made by the opposition to make a qualitative comparison between countries rather than make a data and information based argument in opposition.
Again, though I respect your opposition, the article required a rebuttal and this is what I generated using the facts that I could find in short order to refute the inaccuracies of Moishe's article.
@Neil, thanks. Would any taxes be lowered by this? My personal preference, since the consensus seems to be that an across the board tax is easiest to deal with, would be to take the average of all of the current taxes and make that the new tax rate. I tried to read through the discussion which split and merged into numerous new threads, and I'm still not really sure where the 10% came from.
@HistoryInAction - you requested some information that I am happy to provide.
Quote from the article: At the outset, 8 out of 12 of the existing industry Income Taxes were already at 10%, the other 4 were at 7%. It is important to note that these rates are already higher than the income tax rates that the articles extols as being qualitatively better than the United States.
The reason that I am using only Income Tax at this time is that it was the central subject of the original article: The four industries that were at 7% at the outset are:
Food, Gift, Moving Ticket, and Houses
My hope is that we can tone down the rhetoric and continue the discourse because the import taxes are generally going to see significant reductions which in turn should result in lower costs overall for the American consumer on common products.
PLease do take the time to review the discussion on the forum.
And I wish you great success in your run for Congress!
NeilP99 you said to HistoryInAction: 10% would be about a 5 to 7% increase in income tax in most areas.
That is not accurate, it is a 3% Incoe Tax increase to four industries: Food, Gift, Moving Ticket and Houses. All the rest are already at 10% to my knowledge.
I appreciate your desire to defend Moishe and your position, but let's communicate accurate numbers to the citizens.
@HistoryInAction: The only taxes that would be lowered are import taxes across the board. However American's don't pay those, so no, no taxes would be lower for Americans than they are now, in fact, to the best of my knowledge, the 10% income tax that has been proposed would be a raise in taxes in every sector. The 10% was decided on by a smaller group of Congressmen, I'm not entirely sure what their reasoning was, though it seems to be simply a number that they thought was appropriate and a good place to start, despite the fact that most sectors had an income tax of 3%.
@Ananias: Most of those areas have only recently been moved up to 10% though as part of an earlier version of the proposal that is now being moved through Congress.
@Justin, thanks! Your post might even be worth a post on its own; it's that helpful. I hadn't seen a reason behind the number '10' for the flat tax before this, but I assume it was something that came out of the Economics Council.
I like the Accountability thread in the forums, and I'm keeping an eye on it. I also just emailed you a thought related to that topic that I hope you will consider. Sadly, your information related to spending is the most detailed I've seen yet in my (short) life as an eCitizen. If someone could point me to any other information about spending in the forum, I'd be grateful.
@Justin: I'm not accusing anyone of trying to pull a fast one here, or the government of not telling us where the money is going, I'm simply saying that nobody has made any real effort to tell the average citizen why we need to raise their income taxes. My main arguement against this tax plan is that a flat tax on all areas is fundamentally unfair. Some areas have a easier time making a profit than others because of the natural resourses available in our country. It is only fair therefore, that those areas are taxed more heavily. Unfortunately I think that the vast majority of Congressmen are supporting this tax plan not because they think it is best, or even know what it will do for that matter, but because they're being told to by people who have been around for a while.
Hmmm, I beleive Neil is right here.
Your so called rebuttal seems more like a focused attack against one person to me. Calling them a lier and fear munger for doing what they feel is right and attempting to stand up for the people and then hiding behind what you are calling facts. I see nothing of what you are trying to say in Moishe's artical. You have taken something done in good faith and having nothing at all to do with ranking numbers (really, where did you get that crap from his artical? I must have missed it)and turned it into fear mungering and bad and lieing. What Moishe is saying is plane to see and trying to pervert it with this propaganda is disgusting.
Thank you for weighing in Justin, I appreciate it and it was very informative for a 1st term congressman like myself.
@NeilP99 - Thanks for the clarification, in the article I was pointing out the changes related to the CTPA only, as was Moishe (based on the link he furnished in the article).
@Neil, considering this whole discussion was started by Jewitt, an amusing numbers kid who was newly elected, and championed by Ananias, another relative newcomer, I think that last sentence is a little unfair.
I think that most people found the idea interesting and worth pursuing. If there are counter-arguments, people aren't hearing them. As Jewitt says in his paper, most counter-arguments go along the line of 'no new taxes! eof' or "Uhm, we need more info on government spending." (he does prop you for your rational disagreement, if you haven't seen his paper: http://www.erepublik.com/en/n[..]534/1)
Frankly, Neil, you should have been the one to write the rebuttal, not Moishe. It sounds like you're the one with the important concerns that can be reasonably argued.
Also, the only resource we don't have High in is diamonds, right?
Justin is right on track. Plus, let us not forget that this was an open congressional discussion that reached the required number of sponsors. I applaud the congress for being active, coming to the conclusion something had to be done, and came up with a plan. The economy will benefit from these changes.
As far as income tax is concerned. It is pennies on the dollar, not much to worry about really. Plus, if things start going really well for our economy, I think income tax would be the first we would consider lowering. I won't speak for anyone else, but judging by the conversations I have had with my fellow congressmen, the above statement is accurate.
John Jay
Under-Secretary to the Minister of Foreign Affairs
@NeilP99
It appeared to me that you were trying to raise suspicions at what the government was doing with said funds. In my personal opinions, I am not a huge fan of flat taxes. I feel each and every industry should be evaluated separately and I have made my voice heard, but my opinion only counts for so much and we live in a democracy. My reasoning is that weapons will always make more profit then food for a comparable quality and as such weapons should be taxed slightly more than food should be to even out the disproportionate rewards for working in either company. Although its not my personal ideal tax set, it is very good and extremely well thought out and debated. I full support it and know it will help our country immensely.
Another note about the flat income tax at 10% is to establish a new 0. This is a theory me and a few others had been trying to work out in EC. Basically from the 10% rate it would be treated as the new 0. if a company needed a break it would go negative, and if a company was doing good it would go up from there to 2 or 3 (12 or 13😵 then back down to 10 or back up to 10 when the market stabilizes.
Your right HistoryInAction, Diamonds it is from what I see.
@History
We(the USA) do not have High Iron or High Diamonds
Thanks, mindflay and Justin. I misplaced the link to the resource map, so if someone can link it, I'll post it on the UCP forums (Mentor Board or Business Office likely) at least.
@Justin, the thought of baselining is quite interesting. Thanks for pointing that out.
@mindflay - I included several quote within the body of the text of what Moishe said. As to the Rankings, I enourage you to review the rankings for yourself and determine which one Moishe used in his article. The rest of the research was manually done for each of the countries that Moishe himself enumerated for the purpose of ranking.
I request that you re-read Moishe's article and determine if writing things like:
*demonstrating to the eUSA Working Man and Woman the meaning of Taxation without Representation.
*going to sock it to the working class eMerican
*Ok, so we are playing catch up with Romania
*I find it ironic that political parties like the USWP and Libertarians who claim to support the working man are bought off when some of their representatives are given jobs in the Cabinet or Administration.
is actually in good faith or propoganda itself?
Stating that citizen are not represented in congress, they are getting it socked to them, we are just trying to play catch-up with Romania and that the only reason well-deliberated and proactive legislation is because the parties are being bribed with positions...that is not good faith, that is meant to be incendiary.
I think the issue is that your were not expecting a reasoned and strong response. And, honestly, in retrospect, I wish we could have just had analysis and discourse...oh wait a minute that did occur...in the congressional forums prior to ever putting forth the proposal.
I have no qualms with educating citizens about the pros and cons of CTPA, but lets cap the rhetoric and state the facts.
@Justin How much impact do you think these tax increases have had on the current trend of lowering worker wages in the eUS? And what do you beleive the overall effect of these tax increases will be on the average eAmerican worker?
Should we be raizing taxes on finished goods at the same rate that we are raizing taxes on raw matterials? and in the long run what impact do you think this will have on wages in the Raw matterials industry sector?
I agree with you, on all except for one thing.
"cap the rhetoric and state the facts." That times was passed by you sir. A logical rebuttal stating the flaws that you see in the artical would have been enough to get peoples attention and demand that they take a second look. However, I have to agree with justin in saying "it did not show a counter point to Moishe's article and really didn't back up anything else. It did point out some bias in Moishe's article and some obvious flaws in his logic."
There are two sides to this story and I for one feel that these new taxes are not being created with the best interest of the average eAmerican in mind.
Admittedly there was bias in my article. I abhor the thought of an across the board tax increase/tax decrease just for the sake of "seeing what will happen". Dealing with each tax separately for definite reasons is what we should be doing. Do we want to raise income tax on diamonds to slow down employment in that area? Fine, then let's do it so that it actually has an effect. 10% is not going to do that. If you want to curtail people working in diamond industries then set the tax at 40% to 50%.
But none of this explains the lowering of so many import taxes. 15% import tax is not going to help until we can start lowering wages. Such a large sudden change is going to cause many business owners to suffer because they will have to:
1)Immediately cut wages causing employees to quit and go elsewhere
2)Immediately lower prices possibly not making enough to stay in business when many are on the edge as it is
Gradual changes and then a stabilization period is what is needed. Not all these drastic changes all at one time.
@Moishe, that last is a very, very good point. We won't be able to tell what effects each individual change to the taxes has had, and since the Congress does seem to be taking "I think this is good, but we'll just have to see," approach, you're completely right. We need to see what each individual change does before making the next.