On Import Taxes
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by Ralph Kline
The concept of the erepublik economy is a simple one. Yet there are as many views on how to manage it as there are citizens. Really, it does one thing, just in a few different ways. Each citizen account is born with minimal attributes and the game provides a path to increase them. Experience, strength and rank are of course the attributes and the "economy" is the path. Gold is the means offered to accelerate the citizens speed along the path.
The path is well decorated, it looks as though success and opportunity exist along the way. Realistically, it is very linear and very, very prone to setback when game changes are introduced. We get what we pay for, really. Kind of dark facts, but exactly the sort of things to be kept in mind when making finacial decisions.
How do we make the best use of our daily productivity and gold, as indvididuals. What is a waste, what is not? That answer is subjective to the players gaming budget.
As a community however, the answers should be more obvious. The decisions made by congress, specificly tax rates , need to provide a maximum benifit to the most citizens. The "economy" must be tuned to move the most citizens along to a point where they no longer need help. This is done by putting the most money into the most pockets of those who will spend it. Meaning lots of high paying jobs and those are in the manufacturing industry. The way the job market is now employment in any of the raw or low quality manufacturing companies is nearly unheard of. Jobs in the manufacturing industry also depend on a cheap supply of raw materials, when the raw prices get too high the costs are incorporated into the manufactured and once they get too high sales collapse as buyers seek other options.
There is a discussion at hand that would see import taxes rise to 99% with the hope in mind that the price in the weapons raw material market will rise and so increase the prosperity of WRM company owners .I do not believe this to be true, honestly I think the increase in price will not change the fortunes of WRM company owners whatsover given the inconsistencies of the "Platobot". I do not believe foreign dumping has much of an effect on our money market, compared to the benefit price competition provides WRM buyers. I do think that higher raw prices will mean less jobs, lower paying jobs and less immigration. To further this end I suggest we think about lowering the import tax on food raw material to 5%.
-Ralph Kline
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Less RAW on our markets MAY lead to higher prices in the short term but that will just act as an INCENTIVE for players to invest their money in more WRM Companies while RAW prices are high
After time we will reach an equilibrium where supply is equal to demand,
The argument to raise import taxes is an absurd one from a jobs perspective. Prices will have to rise to 55cents for WRM just to break even on the 35g rubber plantation at labour market prices. Q5 weapon prices would have to be 46.88 just to break even as well, providing no return on capital.
Besides this the market bot seems to not be functioning today, and already prices are plummeting. Another day of this and there will be massive shocks throughout the econ as prices for everything will need to adjust quickly without its bot support.
However raising import taxes to 99% does serve a purpose under a functioning market bot, and should be implemented to preserve currency value. When less cad is created by the bot to buy up supplies then its relative scarcity keeps the gold ratio lower then it would otherwise be. It may only be a fairly insignificant amount but its better then the alternative.
Prices plummeting? - they've gone down 2 cents on RAW.. From 33 to 31 cents
and Nobody should buy a Rubber Plant anyways - If you're buying Rubber Plants and want to talk about Return on Investment, you're playing the wrong game...
35 Gold (49,000 CAD) for 1 Rubber Plant = 245 Base Raw per day
6 Saltpeter mines @8500 CAD each = 51,000 CAD = 1050 (6*175) Base Raw per day
But Rolo, that's an extra 50 health....
Your exactly right about the ROI on the raw companies and that just further shows that the raw sector will never create jobs. As you said raising the tariff on wrm will only be a transient boost to wrm prices, as more local production will come online faster. That price discovery would only be the case if the bot ceases to function, otherwise the prices will be given a ceiling target range.
I do consider a 10% drop in wrm from 34, and a 10% drop in frm from 32 in less then 24 hours to be plummeting. Without the bot mopping up the excess supply of both raw and finished goods, prices will continue to plummet. This should be good for our currency and real wages probably won't suffer but there will be a big dislocation.
Either way, I don't see any reason here not to raise the import tax.
"The decisions made by congress, specificly tax rates , need to provide a maximum benifit to the most citizens. The "economy" must be tuned to move the most citizens along to a point where they no longer need help. This is done by putting the most money into the most pockets of those who will spend it."
I think that was a good observation by Ralph. Newer players who can sell Gold for more CAD do benefit with more currency being injected into the MM. I'm not sure about the effect on jobs, but it is an interesting theory to compare with my theories on WRM imports, especially where you propose 5% import tax on FRM.
I believe if you feel this is the right step, then I would welcome a counter-proposal in an article for 5% FRM. I'd very much like to see what types of responses come in the comments. Perhaps there is a middle ground that can come out of each of these two articles (5% vs 99😵.
😁 Thank-you Plugson😁
I like this sort of public debate and my goal here was to provide another view. This view has been made stronger to me this morning with the introduction of the 2x training buildings. As everyone moves along in the game, the need to catch-up or maintain the status-quo grows greater.
Going forward, earning money with raw companies will probably continue to get more difficult regardless of tax-rates or market competition, as manufactures move to make their own raw materials. The " Platobot" is a tweek for game balance and can't be counted on in any plan, it's use is unpredictable.
"There is a discussion at hand that would see import taxes rise to 99% with the hope in mind that the price in the weapons raw material market will rise and so increase the prosperity of WRM company owners."
This is a fail strategy.
First, what makes WRM in eCanada so special to deserve this? Nothing. In almost every market in eRep, WRM is sold domestically at a loss when produced with domestic labour. The only items in the entire portfolio of eRep items that can be produced with domestic labour and sold at a profit are Q5 and Q6 weapons. Its just the way it is.
Second, eCanada's production bonuses are so weak at 60/60 that it is a massive social program to prop up any industry for the sole purpose of protecting the wealth interests of the business community. A better strategy would be to pursue max bonus in food or weapons and then focus on a tax strategy.
Third, the eCanadian purchaser is already buying goods in other markets because they are cheaper elsewhere. Higher import taxes won't change anything, you've already lost this demographic, and its a small one.
It is a losing proposition to battle admin on monetary policy. Admin injects too much cash. To combat this, a government has to increase the volume of transactions and this would require lower prices, attract foreign purchasers to Canadian markets.