A long lesson on how things are.

Day 558, 12:33 • Published in Israel Israel • by BuzzyTheCat

Hello Israel,

I am writing this article to clear some things up and to make a long winded explanation of the way things are. Erepublik is 180 degrees different than real life. Yes, some very abstract ideas from real life work in the Eworld, but most of the broad ideas simply do not apply here. Namely, low taxation, capitalism over socialism, and congressional oversight.

First, the tax issue. In real life, low taxes are the aim of everyone right of center. No one likes taxes in RL. They are however a way of life and a necessary evil. The same is true in Erepublik. Sure, everyone wants nonexistent taxes, and without thinking like a government, crazy low taxes are a great campaigning tool. The reality however is that you NEED taxes for many reasons. First, income tax regulates the value of the NIS. A high income tax not only provides income for the government, it also removes money from the market at a stable and steady rate, which keeps the value of the currency stable and steady. We have to look no further than the US for this example. About 3ish months ago, the USD was soaring over 60 USD per gold because of government spending. Now, government spending isn’t bad in itself… government spending however needs to be kept in line with taxes. So what did the US do? They instituted a 20% income tax. 3 months later and the USD is now stronger and more stable than it has been in nearly a year. I would also like to point you at other countries around the world and have you look at their taxes. Just for clarification, Israel has a flat 10% income tax. Now how do other countries compare?

Sweden – 15% income tax
Norway – 18% income tax
USA – 20% income tax
Switzerland – 50% income tax
France – 12% income tax

On the opposite side we have countries like Japan and South Korea who have 1 and 2% income taxes… and guess what? Their monetary value is horrible and their countries have generally failed to expand despite months of being in existence.

Israel is far from being “overtaxed” by any stretch of the word. Yes, Spain and Romania have 5% income tax rates… they are also between 6 and 20 times the size of Israel, and even with 5% income tax, they make more gold per day through taxes than Israel will make in a month or more. Bottom line, taxes really have nothing to do with business strength or worker strength, taxes have nothing to do with people moving to or from your country, but they do have everything to do with government funding and monetary strength.


Second, taxes create revenue for the government. Would it shock you to know that as a high skill worker in a place like Romania you could make nearly half of what Israel does as an entire country in a month? It is not only true, it is kind of sad. Israel as a country, with our low taxes, makes less gold in a month than a country like the US or Romania does in a single day. To put that into perspective, it would take roughly 3 months for Israel to earn enough gold through taxes to purchase a single Q5 hospital. In our current situation, it would take Israel 12 months, yes, a year, to earn enough gold through taxes alone to purchase 2 Q5 hospitals and 2 Q5 defense systems. This doesn’t even touch on the fact of the single most important expense a country has, its military. In order to provide the IDF with the funding it needs to operate perfectly, Israel would need far far higher taxes than we currently have. 700 weapons for a single day of fighting aren’t cheap. If you add in the cost of having funding for 2 days fighting, and a 2 day reserve you have easily just made it into the “how much gold did you just say!?!?!” range. You know the last time you bought a few Q1 weapons to fight? Remember how much that cost? Ok, now multiply that by 60, now multiply that by 4, and you are just getting a rough estimate of a single day of military expense.

Without writing a 20 page essay on this subject, I will say this in summery… “low taxes” in a country the size of Israel are simply irresponsible and dangerous. Yea, they look great on paper, they make amazing campaign promises, but in reality they will kill an Ecountry very very quickly. Maybe when we reach the 10,000 citizen mark and we are collecting more gold than we can ever hope to spend, we can revisit the whole tax issue. For now however, “low taxes” basically equal “useless military” “poor monetary value” and “bankrupt government”. Sorry, that is just the way it is in this game.

Next is the idea of a purely capitalistic society where government “protects the boarders and delivers the mail”… It doesn’t work. Well, to be fair, it works, but far from delivering “optimum results” Government run business can be found in every large and middle-sized country in this game. Some countries, like the original Pakistan, created entire empires built around government run businesses. Not only did it work, it worked so well it took some of the fun out of the game. It worked so well in South Korea that large countries like the US and Canada feared South Korea because their cheap products could destroy the US economy…while at the same time still making huge profits for South Korea.

Now lets go back to my earlier example of supplying the IDF with weapons. Lets say, we need to supply 10 soldiers with 12 weapons each. That is 120 Q1 weapons. On the “free market” 120 weapons would cost roughly 20.76 gold (.17 gold per weapon, current market value of a Q1 weapon on the Israeli market) Now, if you don’t know how a company or production works, ill give you a small lesson here. A weapon, uses 5 iron per Q level. (Q1 uses 5 iron, Q2 uses 10 iron, Q3 uses 15 Iron, etc) 5 iron, going by current world prices, Iron costs about .70 NIS per unit. So a Q1 weapon would cost a company owner 3.5 NIS in raw materials. Now, add in a worker. A 10 skill worker at 100 wellness in a properly run company of 10 employees, can produce 9 Q1 weapons in a single days work (45 production divided by 5) Lets now say that this 10 skill worker, working in a Q1 company makes 25 NIS a day (the current market value of a 7 skill worker in Israel working in a Q1 weapons company) That means the company is paying the worker 2.77 NIS a day to produce 1 weapon. That gives us a grand total of 6.27 NIS per weapon.

Now using that example as a base line for our IDF supplies, instead of 20.76 gold to supply 120 weapons, if we use a government run company 120 weapons costs 14.52 gold… we just saved 6.24 gold by operating a government run weapons company. Or, if we still have 20.76 gold to spend, it means we just produced 52 “free” weapons. (6.24 divided by .12) This is why just about every country in the world runs government companies… Without them, the likes of Romania, the US, or Indonesia, would never be able to support large-scale military action.

In summery, THAT is why Israel NEEDS government run companies. Without them, our already low treasury would be like “pissing into the wind”. Needless to say, without government run companies, Israel wouldn’t be buying anything anytime soon.

Now for the biggie, the one thing everyone loves to toss around. Congressional oversight (IE “government transparency”) It’s dangerous. Plain and simple. In the world of Erepublik, where a congress member will write a newspaper article spilling government secrets, where a congress member can win a seat with 2 votes, and where a congress member will only serve for a total of 30 days in a term, congressional oversight is a really really good way for your country to get spied on. In this game, a country doesn’t need a network of spies, informants in 20 different countries, or any other sophisticated espionage system… they need only read newspapers and use Google Translate. Having an “expense report” of what government is spending its money on, and how much money they are spending would read pretty much read like a “how to attack and destroy this country” guide.

I will also go out on a limb here and say this… why does the public need to know how much the government is spending, and on what? The simple answer is, they don’t. Please, show me a large or middle size country in the entirety of Erepublik who publishes their “expenses”. The US doesn’t, neither does Romania, Spain, or Indonesia. Doing so is a detailed description of “how to attack me, and once you do, you know know how long I can last in battle”

Going even further, you are suppose to elect people you trust. Not your friend, not the new popular guy who joined 2 weeks ago, but wrote 20 newspaper articles, not the guy who promised you what you wanted to hear… you elect the person who has experience at the job, and who has a track record of being trustworthy and reliable. This is another reason you really don’t need an expense report. You should be able to trust your elected government to do what is right. If you can’t trust them, well, then you really shouldn’t have elected them.

TL😃R version… Government run companies are necessary, Israel is far from being “overtaxed” and congressional oversight/government transparency is not only foolish, it is not needed if you elect proper leaders.

Thank you all for your time,
Buzzythecat