Taxation
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by Ari Lazarus
Most, if not all protectionist import taxes should be lowered.
Why?
Competition drives industry, and our protectionist measures have shown to be ineffective in shielding the industry in times of war (observe the weapons and gift industries during the invasion of WA, followed by the diamond industry after NT was taken). Export businesses like stable import taxes that do not fluctuate, so it is unreliable to change taxes simply because a nation has a sudden shortage of a particular product. Instead, it should set a standard import tax that holds throughout war and peace. This encourages investment as well as providing locals an ability to get goods if local companies are compromised or removed from the market via invasion.
People say that this will kill the local economy. I do not agree.
Right now eAustralia has high wages and high product prices. The reason for this is that we have a worker shortage, and thus more and more companies offer high wages, regardless of the sustainability of offering said wages. These companies are on borrowed time. Introducing foreign competition will not only weed out said poorly managed companies, it will also lower wages across the board as GMs are forced to price their produce competitively. This also has the added side effect of gradually encouraging our natural industries to flourish, since they are able to maintain a competitive production edge and pay workers a better salary. This in turn leads to more exports and a stronger economy.
How would we know where to set the taxes to?
Import taxes should not be placed at some arbitrary number like 50%, but instead closer to the margin difference between the local and foreign prices. For example, the cheapest average price of Q1 weapons in the world right now according to eReptools is found in Switzerland at 0.0998 gold per weapon. Local weapons are priced at 0.1256 g / w. This leads to a price differential of 25.85%. By lowering import taxes to, say, 20%, only foreign companies who sell weapons at 0.11976g OR LESS will be able to profit off the eAustralian local market. This leads to a more competitive environment overall, without totally flooding the market with foreign goods. This allows local GMs to still compete, but at prices which are much closer to the rest of the eWorld instead of just within an artificial bubble.
Concluding Remarks
As we are a nation that does not have a naturally occurring high iron or high oil region, I will expect that our prices will always be slightly more expensive than nations that do have those regions. However, we should all have access to reasonably-priced goods instead of being gouged by our own local companies.
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Comments
Well said. Voted!
Yep... our wages will fall... a lot...
the end result will be the same as at the moment but with no australain industry at all...
and the general managers that have invested gold in building up companies will lose out...
Support the foreign companies that brought us offers like 1 q5 weapon for only $150, and let the Aussies companies die. People like you want to see our own people get bust. Solve the issue with a babyboom and prices and more important wages will go down. Do not let foreign companies in.
@ Org PDP, you are a foreign company so you are supporting it.
Org PDP is me. I'm an eAustralian citizen. I support Ari's plan.
I've been an ecomonic minister and CP in another country. I have 4 orgs in 4 countries. Of all the countries I invest in, eAUS is the most difficult. The other 3 countries do not have 99% import taxes (except on their high strategic resources).
People say the economy is messed up and we have to make changes. Consider the possibility that the 99% import tax is one of the things "messing up" the economy. Only a few countries have across the board 99% import tax rates (eIndo and eHungary for example).
High import taxes are an abberation and isolates us from the world economy. It keeps our wages and good expensive and thereby limits our ability to export to other countries.
and where were the cheaper aussie q5 weapons? there weren't any because our cupbard was bare. we need a deeper market which can supply us in both times of war and peace. austalia needs to get more efficient. at the moment our industry lives in a cocoon of 99% taxation.
"the end result will be the same as at the moment but with no australain industry at all..."
Wrong. If you bothered to read to the end of the article you will notice I mentioned that the adjusted import tax will only allow well-run foreign companies to make a profit in the Australian market. While this does not flood the market with cheap foreign products, it ensures that local GMs stop price gouging and come more in line with global prices.
"Support the foreign companies that brought us offers like 1 q5 weapon for only $150, and let the Aussies companies die. People like you want to see our own people get bust."
Debate the issue and not the person. By throwing ad hominems (i.e omg u want to see ur pplz fail!!?!) like that around you only make yourself look like you have no contribution to bring to the issue. Infin has already addressed this point: where were the Aussies who made cheaper weapons? They got bought out. The local industry failed to provide for the needs of the populace in a time when it was critical. Were it not for the emergency import tax reductions the military capabilities of the country would have been further paralyzed.
If Australian companies flourish only because our tax laws help make it so instead of being able to stand on their own two feet, they deserve to be culled to make way for GMs who know what the hell they're doing.
Agree 100%!!!
Also consider this. The new economic module will introduce at least 3 new weapons and 1 new resource (per the screen prints released by the admins). This will mean even more companies and greater demand for workers. If we have 99% import taxes on these new industries, and no one working in them, we will be at a disadvantage militarily and economically because these goods will not be available to us.
good stuff.
The weakness of the eAus economy is casued by the use of local supplies of Wood and Iron; once they are replaced by profitable companies, the entire economy will improve.