The Neverending Tax Debate

Day 1,155, 12:04 • Published in USA Ireland • by deadlittlepuppy


Yeah, yet another newspaper article on taxes, You're sick of em and so am I, but the recent "features" the admins have put in place have significantly changed the way our economy operates. Now that company owners can work in their own companies, they can totally bypass our tax system. The only tax they pay on their income is a very small VAT tax when they sell goods out of their own companies. This shifts the tax burden even more to new and younger players and away from older "wealthy" players.





So what can we do about this? The first thing I think we should consider is raising the VAT on all finished goods to at least 5%. This way, every time a company owner sells product out of his own company we at least get some tax revenue from these companies rather than no taxes. Everyone should share the tax burden, not just those who are too poor to buy their own companies.

Won't this hurt new players by making food more expensive? Yes but coupled with this I propose increasing funding to Meals on Wheel and Arm America funding to compensate for that.

Won't this hurt the military and our militias by increasing their costs? Yes but we can compensate for this too by increasing their funding amounts by a corresponding amount.




Secondly, we should consider raising import taxes to the 3-5% range. Why? Well here is an example. Suppose the US wants to import bicycles and they have two choices, import them from Mexico tax free for $38 or import them from China for $35 with a $5 import tax. At first glance Mexico would be the better choice. We can have bikes on the market for only $38 from Mexico versus $40 from China. But wait! If we import from China the government will get $5 tax revenue from Chinese companies. On top of that, not all of this additional tax will be passed on to US consumers, some of it will be absorbed by the chinese companies. We can't ever get exact numbers on this but say the final price ends up being $38 for bikes imported from china. That means the eUS government gets $5 tax revenue from these imports for only a $3 increase in price to the end consumer.

This does not apply exactly to erep since real life economy is not the same as the erep economy. We can't set different import tax rates for different countries but the underlying principles are still the same. We could still add a 5% import tax to all imported items and some of that tax will still be absorbed by the importing companies resulting in a net increase in tax revenue without all the cost being passed on to the end user.

But don't we need free trade to keep prices low? Not really, there is plenty of competition in the eUS to keep prices low. All this will result in is a "ceiling" on prices.We will just see imported products slightly higher than eUS made products providing a buffer against rapidly rising prices. Those importers won't go away, they will just pay some taxes now.



Last but not least, Income taxes. We really don't have a good idea yet exactly what effect the new econ "features" will have on our economy BUT if these tax changes have the desired result, I would definitely support a cut in income taxes. We have some of the highest income taxes in erep and some of the lowest import and VAT taxes. It's time to change that.