[P&P] Calculations for the eKnesset debate on the import tax
Day 2,689, 12:14
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Published in Israel 
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by
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by DrHavoc
eKnesset report
There is an ongoing debate in the eKnesset about how to change our taxes.
In my presidential program "For a Prospering eIsrael", I made a promise that if I win we'll revise the tax system. This process is part of this promise.
Record from the eKnesset threa
I made some calculations, spent more time on it than the game deserves
Let's take the following assumptions to simplify the case:
- no worker was involved except the producers
- all raw material was self-produced using saltpeter or rubber
- foreigner is selling tonight in Isreal his daily batch of Q7 tanks (14-20 units dependent on the bonus)
- Q7 = 6,17 NIS
This means that despite production costs and raw bonuses, an american seller is making more profit than an Israeli producer by
17.83 - 22.18%.
By selling his batch of 20 Q7 this is
12.06 - 15.9 NIS MORE profit than the hypothetical Israeli producer!
IF you decrease the total tax burden from 8+3% to 8+1% the American will be a tiny bit more profitable:
17.95 - 22.20% more profit,
12.4 - 16.35 NIS more than the Israeli producer.
By the way an American who is selling here can make more profit than back in the USA...
The difference between Rickolas' tax reduction and the current prices are marginal for the foreigners, better for us. This is OK, as it improves the situation of the Israeli producers.
However the huge disparity between foreign and domestic profits is still alarming.
Let's continue with a Serbian hypothetical seller:
He's even more profitable than the American:
19.9 - 24.12% more profit than the Israeli
13.42 - 17.37 NIS more profit than the Israeli
The difference after the tax change is around 0.03 NIS.
These differences are different per product, but in the case of Q5 tank a Serbian can achieve 21.16 - 24.87% more profit than an Israeli!
Clearly the case is that foreigners are making much more profit on us than an Israeli producer! We shouldn't allow this!
Let's say we lower the VAT to 1% as it was proposed, but in the meantime raise the Import tariff.
To equalize the profit levels between domestic and foreign:
in the Q7 market
A total tax of 25% can almost equalize between domestic and foreign!
The American's profit of the Israeli:
96.98 - 102.52%
The Serbian's profit of the Israeli:
99 - 104.42%
As you can see they can make the same profit levels as our citizens.
However the same total tax of 25% would effect
in the Q5 tank market more:
The American's profit of the Israeli:
73.99 - 85.75%
The Serbian's profit of the Israeli:
93.4 - 101.85%
The total tax of 25% on foreigners regarding weapons are too high.
We have consider that regarding the preliminary results of the eIsraeli National Census, we have much more Q7 weapon companies than the rest.. combined. Of course these are not the most precise numbers. The census was completed by fewer people than those who usually vote. Still it is very valuable information regarding our economy.
Without further calculations, my number for total tax on weapon is
21%
(1%VAT+20%ImportTriff)
Based on the above elaborated assumptions:
American's profit of the Israeli:
Q7 market:
101.7 - 106.95%
Q5 market:
81.27 - 91.79%
The Serbian's profit of the Israeli:
Q7 market:
103.72 - 108.85%
Q5 market:
100.68 - 107.78%
Still way too fair with the foreigners.
I would propose to make further calculations based on my model.
Every country is different Serbia for example seems to be very competitive. USA is okay, Argentina is worse (they have the same bonuses as us). Also we shouldn't expect much import from small countries, so I'd skip those from the data collection.
If somebody wants to help me with the numbers, send me a message.
There is an ongoing debate in the eKnesset about how to change our taxes.
In my presidential program "For a Prospering eIsrael", I made a promise that if I win we'll revise the tax system. This process is part of this promise.
Record from the eKnesset threa
😛
I made some calculations, spent more time on it than the game deserves
😃
Let's take the following assumptions to simplify the case:
- no worker was involved except the producers
- all raw material was self-produced using saltpeter or rubber
- foreigner is selling tonight in Isreal his daily batch of Q7 tanks (14-20 units dependent on the bonus)
- Q7 = 6,17 NIS
This means that despite production costs and raw bonuses, an american seller is making more profit than an Israeli producer by
17.83 - 22.18%.
By selling his batch of 20 Q7 this is
12.06 - 15.9 NIS MORE profit than the hypothetical Israeli producer!
IF you decrease the total tax burden from 8+3% to 8+1% the American will be a tiny bit more profitable:
17.95 - 22.20% more profit,
12.4 - 16.35 NIS more than the Israeli producer.
By the way an American who is selling here can make more profit than back in the USA...
The difference between Rickolas' tax reduction and the current prices are marginal for the foreigners, better for us. This is OK, as it improves the situation of the Israeli producers.
However the huge disparity between foreign and domestic profits is still alarming.
Let's continue with a Serbian hypothetical seller:
He's even more profitable than the American:
19.9 - 24.12% more profit than the Israeli
13.42 - 17.37 NIS more profit than the Israeli
The difference after the tax change is around 0.03 NIS.
These differences are different per product, but in the case of Q5 tank a Serbian can achieve 21.16 - 24.87% more profit than an Israeli!
Clearly the case is that foreigners are making much more profit on us than an Israeli producer! We shouldn't allow this!
Let's say we lower the VAT to 1% as it was proposed, but in the meantime raise the Import tariff.
To equalize the profit levels between domestic and foreign:
in the Q7 market
A total tax of 25% can almost equalize between domestic and foreign!
The American's profit of the Israeli:
96.98 - 102.52%
The Serbian's profit of the Israeli:
99 - 104.42%
As you can see they can make the same profit levels as our citizens.
However the same total tax of 25% would effect
in the Q5 tank market more:
The American's profit of the Israeli:
73.99 - 85.75%
The Serbian's profit of the Israeli:
93.4 - 101.85%
The total tax of 25% on foreigners regarding weapons are too high.
We have consider that regarding the preliminary results of the eIsraeli National Census, we have much more Q7 weapon companies than the rest.. combined. Of course these are not the most precise numbers. The census was completed by fewer people than those who usually vote. Still it is very valuable information regarding our economy.
Without further calculations, my number for total tax on weapon is
21%
(1%VAT+20%ImportTriff)
Based on the above elaborated assumptions:
American's profit of the Israeli:
Q7 market:
101.7 - 106.95%
Q5 market:
81.27 - 91.79%
The Serbian's profit of the Israeli:
Q7 market:
103.72 - 108.85%
Q5 market:
100.68 - 107.78%
Still way too fair with the foreigners.
I would propose to make further calculations based on my model.
Every country is different Serbia for example seems to be very competitive. USA is okay, Argentina is worse (they have the same bonuses as us). Also we shouldn't expect much import from small countries, so I'd skip those from the data collection.
If somebody wants to help me with the numbers, send me a message.
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Comments
V
i dont think the issue should so much be worrying about how much profit a foreigner is making, but the issue should be about what is going to help the majority of Israel. the economic module is a joke, it is hard for a person to make it by buying anything at any price off of the market.. we should be wanting to make prices on products cheaper so that our citizens can afford to have their own companies so that they can support themselves. having cheaper products means our citizens will buy more and will make themselves stronger by fighting with better weapons and being able to better afford food to replenish themselves
My calculations suggest that the import tariff of 8% doesn't hurt the foreigner importers at all.
So we can raise it more, they will be still selling. Maybe some of them will be forced out and that is the goal here, to give space the local producers.
It is not about making the prices higher.
Majority of the players won't going to buy serious companies for themselves either way. They spend their gold on training ground and stuff. It is practically impossible to get that much amount of CC by just working to get yourself serious factories.
The only way of makeing more money is by investing all of your gold into companies and try to make profit. It is already very difficult, but by killing the Israeli producers with foreign competition they won't be able to get even that little profit, result is a stagnating economy, where there is no investments for upgrades.
Low import tariffs doesn't bring prosperity to anybody, it will just make foreign sellers richer, and no Israeli citizen will benefit from it.
drhavoc like you said the majority of players will not buy serious companies... they will spend their gold on training ground and stuff (food and weapons) that is why the prices need to be cheap so they can build their character up more.... all that will happen by raising import taxes is make things more expensive... ppl will buy less or use common sense and buy their stuff from elsewhere. I wish you and a few others would grasp the concept that we do not have land bonuses and there is not much profit to be made in Israel with or without a kosher program or raising import taxes... only way ppl here will make a profit off of their compmanies is by Israel conquering much land (which is not going to happen) ... surely we can all come to grasp with this simple fact and use our time doing something more constructive
So you essentially say we just give up our economy? Because that is what I get from it.
No import tax eliminates our industry. Simply that.
From the very early on I wrote we don't have enough bonuses so our companies are less competetive and this is why we have to help them. But you can read those comments and messages again.
And please don't tell me that it's a pointless, non-constructive argument.
ts pointless.... israel has never had a good economy and unless plato decides to do something special for israel... we will never have one... Israel does good to have a country let alone a thriving economy... but personally id really like everyone to go ahead with the kosher program and these tax changes you want to propose, so you guys can see for yourself... or even prove me wrong. i would love to be proven wrong on this to be honest. i appreciate that you guys are trying but i dont think its going to pay off in the long run and would like to see the hardwork, intelligence, and effort put towards something else such as the new players and the military
v
Importers are not just foreigners
I don't agree. How many israelis got q5-7 weapon factories? Not a lot, probably less than 5. If we want our market to be active, we must make foreign want to sell here.
Sorry for mistakes, sent from phone.
They do and they will.
An American or Serbian is still able to make nice profits while paying 25% on taxes.
No. They'll sell in a more profitable market...
That is what I would do.
But some will stay. And that is alos the aim here to reduce the foreigners' market share.
We need to worry for our citizens first. Of course it is vital that we encourage foreigners to sell in Israel.
I agree with DrHavoc with a few changes. V+
Did you take into account that said foreigner would, instead of paying 8% tax, go to some other market where he pays 1%.
You are thus making the country lose his taxes, in turn you drive up prices, harming the people you are trying to help.
The communist system should have taught you that a controled market just dont work
And the recent and not so recent eceonomic collapses must have taught everybody that uncontrolled market just don't work.
Besides I hate to bring up China, but that is place where they actively controll the market and the economy (not like in a planned economy of the USSR), and still it works.
The matter of how much intervention of the economy a government allows itself is simply based on political views and values.
Also I like the free market of the EU, but it's also strictly regulated. Plus we are not allowed to form economic zones in erepublik. Too bad.
Fine example china, but you conveniently fail to take into account the population numbers. China got the peons and slave labor to support such a system. Israel dont have near the numbers to support even a single company on such a system.
I appreciate the effort you put into this, but stop cherry picking your arguments and start taking all factors into account
Hahh 😃 Cherry picking. LOL.
For example India is almost the same as China regarding your points and it's economic growth couldn't reach China's. I hate this, as India is the largest democracy.
I start to think that those who are objecting my reforms are running out of arguments. Next thing will be calling ma a commie. 😃 At least mosf of us think the Israeli citizens are the most important. We just differ in the ways we want to accomplish it.
The success of economic policies are subject to political considerations and weights.
As a matter of fact there are examples for both economic point of view in erepublik.
You also fail to mention that they use their massive pool of cheap labor to produce cheap products which they foist on the rest of the world. Not by taxing importers to death. They dont need to to. They got the cheap labor.
Labor dispute? Lets just execute a few ringleaders. Problem solved.
Which answers your india argument. Its a democracy with almost press freedom. Govt cant just hang a few ringleaders and get away with it.
Your plan will work in the short term maybe. Longterm it drives away foreign investors and do more harm to the 3conomy than good in a country as small as Israel. Its been tried before. Did not work then either