[CP] Vat Tax 1%
Het Catshuis
Greetings citizens of the eNetherlands,
as promised before the CP elections and during the term as well, the goal of this presidency has been to lower taxes for our citizens to acceptable levels, without putting our budget to any danger, keeping it above 800 000 currency per month (which is an amount necessary for our programs to fully function).
At the beginning of the term, we have lowered Work Tax to 1%, which lead to decrease of tax burden for our citizens. After several weeks of collecting data, we can now observe, whether or not this change was successful in terms of keeping our budget safe. And we can also observe, what effect would have another proposed change, which has been hinted at in the last CP article: lowering of VAT on Food and Weapons to 1%.
https://www.erepublik.com/en/article/-cp-recapitulation-2713324/1/20
Lately, VAT tax has been a significant part of our income (atleast compared to the previous months), with various events going on and people buying stocks for them, and also some good house producers appearing on our market boosting income even further
🙂. So let's imagine a scenario, where we would suddenly only have half of VAT income - and let's imagine a scenario, where we had no VAT income at all.
For easy grasp of the problematic, all necessary data are presented in one simple graph below. It contains four lines:
- Income from Work as Manager alone (= scenario with no VAT... + no other taxes or MM income)
- Income from VAT tax
- Income with 50% of VAT tax (= lower estimate of income, after VAT would be lowered to 1% on Food and Weapons)
- Current income with current tax levels
Also, a line for necessary daily income is highlighted, together with the day, when Work Tax has been lowered to 1%. I will let the graph speak for itself here:
Therefore I would like to officially use this article to start a debate to lower our VAT on Food and Weapons to 1%. I will post this article in the Congress message and on the feed, and after debate period, request the Congress to start a vote. And I count on your support to make this nation better for our citizens, by taxing them as less as possible!
Janty F
The concerned Country President of eNetherlands
Comments
Relief for our own citizens, whilst not endangering the functioning of the state - in fact, given recent developments and stimulation by tax decreasing, the overall productivity (and tax income) will only increase in the long-term!
As a food producer I love seeing the VAT being dropped.
Lowering it from 2% to 1% is going to halve the income of VAT for food for the state. With the current changes in the game (gold price dropping from 700cc to 500cc yesterday, game tokens from 7300cc to 6000cc, all because of the power spins) food prices will soon be dropping as well and therefore I think we should postpone this proposal until the cc (and food) market is more stabilized so we can oversee the changed instead of gambling with it now.
I wouldn't call changing a tax as a "gambling", given the information presented in the article. To summarize it again (and add another point based on economic data the government is collecting for years now):
1. Even if we had no VAT at all, we would still be fulfilling our necessary income by Work as Manager alone.
2. If you look at our market, you will see a portion of our VAT is covered by House sales (which are not affected by this change, as they are already at 1😵.
3. There has been no observable "drop" in VAT income during last Power Spin (the one NOT followed by Black Friday of course, to be relatable). All in all - if the tax is 2%, the tax income from VAT will drop only by 2% of the aforementioned price drop. And, as a great example: the prices of goods are dropping for months after eRep anniversary, where the prices were inflated - and the drop is more significantl, that the drop caused by a lone Power Spin. Yet, our VAT income actually grew.
It would be a "gambling" to change Work Tax in such an occasion, as that tax makes for majority of our regular daily income. It would be a "gambling", if we sold millions of food units on our market daily. True. But here, the influence of the spin will be negligible (and might even end up positive, as people will see lower prices, and will be buying more).
Did I already say Janty = CP for life?
Yeah, I did 🙂
Good stuff. o7
That's the spirit!