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It is possible to have a minimum wage established that would prevent this. However, a quotation from congressional proceedings may help you see why our minimum wage is $1.

"The income tax is an efficient way of transferring money from inactive players to active players who fight in battles that contribute to the nation's interests. The monetary value of average supplies received by any player from government programs, be it B4N, TU2RU, or government-funded MUs, well exceeds the 4 USD per capita income tax collected from employees who do not commune."

In essence, it isn't discouraged to commune, as the income tax is high enough to make money from inactive 2-clickers and communes help keep active players supplied.

Thanks for the thoughtful response, but I have to respectfully disagree with the characterization of this system as mainly a way to redistribute funds from “inactive players”. First, I would define an inactive player as someone who doesn’t show up each day to do their work. The income tax gathers nothing from them. (Maybe you want a property tax for that purpose.)
What we are really talking about doing with the income tax is punishing anyone who tries to participate in a real economy outside the commune system with a high tax rate. Those who stay in a commune system have the results of their productivity controlled by those running that system. Those who try to work independently have a large part of their income confiscated.
Although the conventional wisdom is that the economic part of the game is broken, participating in that is a legitimate way for someone to engage in erepublik. I think portraying as “inactive” anyone who isn’t part of a labor camp and MU controlled by an elite few is a bit disingenuous. Furthermore if a participant chooses to “2 click” with limited fighting as a way to accumulate resources, that should be their choice and a legitimate strategy choice, not something to justify confiscatory tax rates. Someone who “2 clicks” is doing something productive, and costing very little, since they aren’t burning weapons or much food when they aren’t fighting.

I'm going to put my limited understanding of the economy to the test by proposing a couple of reasons why this is going on:

Aside from the limited inflation from the current wars, we are in a deflationary economy, and the best way we can combat that as citizens is to spend money. Two clickers are producing product, but not spending money therefore they are hurting the economy. Therefore they get taxed and the money gets redirected into things like purchasing weapons for the country MUs and other projects.

Communes aren't net negative entities for the economy because they are not contributing to a deflationary economy.

That being said, I have heard grumbles before about communes, but game mechanics wise there is nothing the government can do about them, and they are one of the means by which MUs are able to continue to exist and operate independently of the government.

I guess the best analogy for communes in RL would be non profits companies, who do not pay taxes either.

Communing. The only way to play. By design.

25% income tax + 5% vat doesnt equal 30% overall tax, income tax is based on wages, vat is based on sales price.

Let’s say Joseph Stalin and I are both manufacturing tanks and want to employ you. Let’s say we can each produce 10 tanks per day per employee, and the market value of the tanks is $4 each. Stalin and I are both going to offer you 50% of what is produced from your labor at our factories.

So at my factory you produce 10 tanks. I sell 5 of them for $4 each. 5% tax on the sale is .20 each, so I receive $19 and $1 goes to tax. I pay you $19. Of that $19, you pay 25% income tax, netting you $14.25 ($4.75 goes to tax). With that $14.25, you can buy 3.56 tanks. So for you, effectively I am paying you 3.56 tanks per day.

Joseph Stalin’s communist arrangement offers you, instead of paying a real salary, an allotment of 5 tanks per day. He doesn’t pay taxes, you don’t pay taxes, so 5 tanks per day is what you get.

So Stalin and I both have the same factory, both keep the same 50% of the productivity, but he can offer you 5 tanks per day compared to the 3.56 tanks that I can offer. So no, it isn’t exactly 30%, but it’s somewhere a little north of that, when you look at the effective difference between the approaches. (To keep things simple I didn’t account for the $1 per day that the commune would have to pay you do to the minimum wage. That’s not going to close the gap meaningfully.)

I'm not trying to argue with you, I just wanted to see some calculations. Communing is the most beneficial process for the worker and the producer, but hurts gov revenue, but if everyone was communing the gov wouldn't need the revenue. If you want to keep your tanks just hire people for minimum wage $1 and then donate the rest of the salary to them. Income tax is payed on the $1 but the donation is tax free, this way you can end up paying your workers less but they will receive more.

hm. and i heard a few people who have lost over 30k usd trading in the black market. i got 100k q7 weps i will sell anyone for 7usd each. donate the money first 🙂 ha jk. anyways. so yeah workers 30% added cost kinda sorta.

capitlist economy=business owners make more for more profit= overproduction = prices drops to margin cost.

we need to be taxed or give away our profits so that prices stay the same.

because most higher level players produce more than they use. there needs to be some way to transfer the extra goods to the new players. if taxes are high and a lot of it goes to the new players then prices rise and profits rise and people more happy. if people donated their profits to the poor new players it would be the same as taxing. but most people want to keep their profits so the economy crashes and burns if they are not forced to support the new players.

i still wondering if there are bots that will buy raws or if people have written scripts to chech the markets and buy raws when prices get a certian point. like computer trading irl. stop losses and such.

if there are bots then the economy will be elevated. but because bertrand model of economics says if production can change quickly making goods will be at the marginal costs if production can meet demand.

well and the tax on the employees really just increases the cost to hire employees so not really a big deal for the busness owner. they do not have to hire workers. i guess they don't have to sell products also but ohh well.

i willing to pay high taxes for the safety almost no loss of the markets.

workers get the hard worker medal every 30 days. if they do not work they do not get that medal. 5 gold =1000 usd for 30 days. 30 gold a day from the hard worker medal. worker makes 45 a day and pays 5 in tax so really income tax is 6% not 25%.

[removed]

Dalan Di Celes,

“Two clickers are producing product, but not spending money therefore they are hurting the economy.”

Wait, driving prices down does not equate to hurting the economy. Producing more weapons and food than you consume means more weapons and food are available at lower prices for the people who ARE fighting a lot. (Except of course that a lot of said fighters have very little cash because they work in a commune and don’t get a real wage.) If you are mainly concerned with fighting deflation, aside from starting more wars, you should encourage people not to produce anything and to leave factories idle so prices will be higher. That should not sound economically brilliant, however. Also, if you want to fight deflation you want to pay high wages so people will be able to buy more … as opposed to, say, paying them $1 per day. Raising the minimum wage would help fight deflation.

90+% of the economy in the game is built around fighting (the only consumption not driven by fighting is what food you need to work) so the amount of fighting going on is going to be the primary driver of price inflation or deflation. Certainly the economic part of the game could use some additional elements.

“Communes aren't net negative entities for the economy because they are not contributing to a deflationary economy.”

Deflation is far from the only thing that can be bad in an economy, and in fact isn’t necessarily bad. Communes are unfair to everyone participating in the normal economy because they are allowed to avoid taxes, which puts all of the tax burden on the rest of us and distorts competition.

“I have heard grumbles before about communes, but game mechanics wise there is nothing the government can do about them”

The best solution would be taxes on “donations”, which would have to be a game mechanics change. However the government could raise the minimum wage to something like $10 per day (still well below the current going rate) and lower income taxes (because they would be collecting a lot more from commune workers) and that would reduce the distortion at least.

“I guess the best analogy for communes in RL would be non profits companies, who do not pay taxes either.”

In RL, non profits are generally doing something where they are not competing with for-profit companies, and non-profits make up a fairly small % of the overall economy, at least if you don’t include the government itself.

Perhaps its that I don't understand your purpose in writing this. What would your overall purpose be? If it is to make businesses profitable, the deflationary economy is destroying that. It currently takes years to make back money in the businesses that still make a profit.

If it is to speak for the workers, I know of no known MU that requires their members to be in the commune (but admittedly I don't know communes other than my own very well), and I get more supplies by working in a commune than I would in a for profit entity. I'm also not convinced that communes are hurting the economy in any way. People working in communes still buy weapons/foodie the main market, and communes don't sell their products on the market (that I'm aware of).

I am not sure why the tax rate is at 25%, but I think it is for political reasons rather than to meet a certain "budget". So the high tax rate isn't caused by communes.

As long as I can "work as a manager" in my own company and produce stuff without any risk, I'm going to continue to do so every day, thereby increasing production and decreasing prices. What incentive will I ever have to stop production? Without a game mechanic for "innovation" how could we encourage people to shut down their factories?

There are a lot of examples of non-profits competing with for-profits in the real world, especially in the health care field (admittedly for government: ie Medicare/Medicaid moneys).

Deflation is inevitable. There is much more production than consumption, and this is the primary reason people have begged for the economy module to be changed. People will never agree to stall their production, and the only counter to deflation is baby booms and massive wars (this one against Serbia should help).
Everyone should be communing. I work a normal job, I don't commune, but if you want more money, just commune. Communes are generally parts of military units, which ensure activity, so 2 clickers don't commune. 2 clickers just make more product without using any, and should be taxed because they aren't good for the economy.

hm, i am slightly confused. i think the second "girl" has a rather large adams apple. but maybe it is just the stretching of the neck.

That is a bit creepy

The overall problem with this game is that there is more producers than consumers. The game model is actually designed this way so you cant fix it without changing the game model.

so are you of the opinion there are no bots on the markets controlling the prices? if so do you have any proof? because without bots the game would be almost like real life. a human player has to buy the goods a human player produces. though i guess in real life you cannot hold a pile of food forever. so i guess in real life there is always a demand for goods already produced because they expire. but in the game nothing expires so some one has to use it.

I heard they turned the buying bot off. That was when gold went from 1000 to 200 and wages went from 300 to 20. It hasn't recovered back, so it must still be off, deflating the economy.

hm, i do really enjoy reading this article.

everyone who WAM's is avoiding taxes!!! OMG TERRIBLE!!!!!
haha.

i work once pay 25% on that work. i WAM in over 50 other places! so i am really avoiding paying taxes!!! i avoid more taxes than most communes!! well at least i would like to think most communes are under 50 employees.

There's always been tax loopholes that people have exploited, back in the day back when they still had orgs and the MM wasn't as messed up you paid the tax for the country you worked in, so you moved to a country with 1% income tax and worked there and sold their currency for USD, countries caught on and lowered their taxes to compete for more businesses because 1% of 1000000 in CC is better than 25% of 0.

Yeah I'm old...