Economic Writing Contest - "Tax Zeus!" by Dodona
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by Stranger Here Myself
The first entry to our Economic Writing Contest - Dodona presents his tax concept and brings you your moment of Zen! (sry, article formatting seems to be f'ed up since the last 'update' - will keep an eye on it and edit later once they fix it)
In the version of the game that we are currently playing, eRep taxation differs a ton to RL taxation. Take the Income tax for example. You get taxed only for the income you receive working on another person's company. You may be making a LOT more income from self-employment (and this is the case for most players, except the young ones), but you won't pay any tax there. And I will not even get to the lack of option to have progressive income tax rates. Moreover, there is no corporate tax anymore.
Another tax that does not function as IRL is the import tax. Why? Because in eRep the vast majority of imports enter the market (import-)tax-free, as it is easy to evade that tax.The only tax which is actually working close enough to the old world is VAT. Sure there is a lot of black market, thus evasion, but I believe that still most of the production (excluding the one intended for self-consumption, personal or within a MU) passes through a marketplace at one point or another.
Enough with the intro already, let's get down to business. In current era eRep we have a unique entity, which should be seriously taken into consideration when we are discussing about tax policies. This entity is the largest consumer of products. About half of the production sold in a marketplace is being purchased by him/her/it. He/she/it is also insensitive to sales tax rate. And we have no moral remorse taxing the hell out of him/her/it.
Which brings me to my first suggestion: VAT on one of the 2 (main) final products should be high. This product is food. 10% in not even high enough; I would prefer 15%. And don't tell me I'm not considering the effect this will have on prices, for I do. If I was not, I would have proposed a 25% tax. Prices will not increase much, since the 2 forces that affect them the most are "global price" and the bot. Not the VAT; not the national resources. Think about that latter point for a sec.Who will win? The Treasury. Who will lose? Those who sell food in the US market. For the foreigners I don't care. For Americans, well.. if you are selling food then you must already be making more than you need per day, so it won't hurt to help your country a bit. Those new players who rely on selling food to grow, I will "compensate" them below.On weapon VAT, I think it will be best to be kept low (3-4😵
, so prices will be kept as low as possible (given that we have already secured enough revenues from food VAT). The cheaper the tanks in the market are, the better for everyone.As for VAT on houses and moving tickets, I can't say that I am familiar with those markets, but I would treat them as luxury goods and impose a high tax (even max).
Import Taxes should be low. The way economies are functioning right now, you cannot protect the local producers through import tariffs. So you have to set them low enough to encourage foreigners export through the marketplace (so Treasury makes some extra bucks) and also use them as an additional means to keep prices down. 10% seems to be too high to serve those tasks, so my suggestion would be a 5% import tax.Last, but certainly not least, income taxes. Let's be honest: established players don't care much about them. Not for themselves at least. Chances are they are not paying any anyways. Same for multies. Income taxes matter mostly for players who need to grow; and those are usually new players. Or players that are not engaged enough with the community, but work/train/fight (in the MU Orders) everyday and are trying to grow. Those players should not have to pay the income tax that the rest of us who are evading. They should just pay their fair share. Given that the Treasury will be collecting quite enough taxes if my food tax proposal is implemented, I would put this fair share at around 12%. To be frank, I'd put it at 8% if I didn't expect a wave of negative reactions to that. For that exact reason I will refrain from proposing a $30 MW as well.
For the end, your moment of Zen:
By taxing the bot you do not print more money. You are just collecting a bigger share of the money that is being printed.
~ Dodona
(As the only entry to the contest within the deadline, this article got both the First Prize and the People's Choice Award.)
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Comments
"the 2 forces that affect them the most are "global price" and the bot."
I'd like to take that claim to the extreme and claim that ONLY Mr. B has an effect on prices, as was shown clearly in the last 4-5 days or so.
Suddenly, and without warning, prices started to drop. Why? Because bot prices were lowered. After that, both started to grow.
The truth is, if the bot buys tanks at 50 USD, tank price will be 50 USD - regardless of CC price in gold, resources, supply, whatever. We have a very twisted example of a monopoly - monopoly of one buyer, rather than one seller.
Only if bot price is set very, very low, supply&demand can kick in.
"since the 2 forces that affect them the most are "global price" and the bot."
What bot?
The one buying most of the stuff from the market. Officially, he doesn't /nor ever has, nor will/ exist.
If you monitor the treasure of the US, you'll see it jumping at some points (at about XX:50 - X+1:00) by the thousands in a single F5 click...
Also, remember those times that simultaneously you were selling a few different products, and they were getting bought up at the same time?
"The truth is, if the bot buys tanks at 50 USD, tank price will be 50 USD - regardless of CC price in gold, resources, supply, whatever. We have a very twisted example of a monopoly - monopoly of one buyer, rather than one seller."
Actually still slightly lower, as there will always be 'instant sellers' cutting under prices dictated by the bot. Estimating that ~1/3 of consumption is still real demand, there even be certain deviations at times, too. But generally you are perfectly right, real life demand/supply relations do not work in eRep, since we live in an artificially regulated overproducing world - thus keeping demand rising above supplies, which in turn, would make the military module defunct.
Had the architects of the current tax regime understood that, their theories would have not failed so pathetically.
@evil, surely the bot has the main effect. It is such a large player in the global markets that it dictates prices. However, there is still room for us mortals to affect prices. As Stranger said, there are the instant sellers. Moreover, if prices drop too low (compared to global prices), those products will be picked up for exports. On the other hand, if they get too high, imports will push them down (n.b. imports don't necessarily have to go through the marketplace).
Of course it all depend on the bot behavior and its price setting.
PS: voted :Ρ
voted. what's up with all this code (or whatever it's called) all over the place? i've seen it in other articles too.
I don't know SPC91X, but I hope Admin can correct it.