The new tax rate.
Auggustus
L.S.
The reason I am writing this article is because DemNL has felt the need to take the current debate out out of congress and make it a public debate.
(If you are interested in the outcome of this article just read the final paragraph)
As everyone can see the admins have brought out a new economic module that allows people to hire more people as well as a more effective way to managing companies. This has been an amazingly good improvement by the admins!
Besides this, the admins have also changed the tax system. Raw materials that are essential to the economy will now also be taxed. They also changed the fact that taxes for workers are apart from taxes on businesses. (This used to be dependent on what industry you worked for).
Since the dramatic overhaul of the module we have seen that wages have risen by 20- 30 NLG already. and what we see that's going on is that our economy needs to adjust to this change.
You may think that 10% is a lot compared with the 4% that DemNL and GPN are arguing for, but in truth it isn't.
In the former modules I was always active with the economic module of the game, and since the latest version of the game changed alot of things. First of all our currency is worthless. currently 1 Gold = 1588 NLG. That means that every NLG is actually worth 0.00063 gold.
THAT is a VERY large difference.
The reason why Luuklag, Antiko, Mael and myself, all of us have been ministers of finance at one point, are arguing for a higher tax rate is so that we take money OUT of circulation. Of the monthly budget only a certain percentage is used and the rest is sent to the national bank the DNB. The idea behind it is that by keeping money out of circulation we can get the rate back towards the 1NLG = 0.001. This means that the money you earn is worth more its weight in gold.
While you may think that the policies of DemNL and GPN will leave you with more money in your pocket, the truth is that it doesn't! Low taxes mean that your MONEY is worth LESS! We need too take money out of circulation.
Comments
In the past the congress could create and burn money to cope with changing gold prizes
We'll have to burn it signing MPP's and stimulate the creating of raw companies. Both will profit both eNL as a country, and eNL citizens.
I was in favor for limiting the subsidy to a certain level, but with the new change the new subsidy law can easily be supported, maybe even increased. But we'll know more once we have some actual numbers.
I agree with you there is to much NLG in circulation, but only raising taxes is not the way to take it out of the circulation.
Now you take the NLG from the 'normal' men in the street, while the really big investors / businessmen can keep on going to use their NLG.
You need more actions then just a tax raise to get a decent MM rate again. And most of this actions cannot be done, as no one just want to send his NLG to DNB to get a better rate.
In the end, everything we try as small county is useless. Only some big country's are able to still have a decent rate.
Yeah and with such an attitude every try is doomed to fail. It is just that we lack a consistent Monetary Policy, and that every government thinks different about it. And unfortunately those populists of DemNL and GPN are set out to completely destroy the value of our NLG under the false pretence that people have more money to spend.
Populists or not, fact remains that the income tax was set at 4%, probably for a reason agreed by all parties, since nobody (not I&W, not TDP, not GPN, not DemNL), suggested we should raise it. Sure, we've discussed the Monerary Market before, but nobody came up with a plan to work on it, not even by raising (income) taxes.
Now, due to some in-game changes we got forced to eat a sudden increase to 10% and it's now stuck halfway our throats. Nobody suggested or wanted this raise, so just get it back the way it's supposed to be.
There is NOTHING wrong with taking the current debate out of congress and make it a public debate. Shouldn't that be a normal thing in a democracy or are 'we', the little players who don't frequent the forum often, not allowed to know what's going on there?
I for one am glad that my party brought this matter to my attention. Did you inform YOUR party members already that you've decided that the CP's election promises are worthless and players should swallow a 150% tax increase?
I think it's rather cowardly to hide behind admin's back and say 'hey, they did it, not us' and then come up with all kinds of reasons why it should stay that way. In fact it's undemocratic because no one, including congress, voted for it.
@Piet Valken, that nobody tried to change it, doesn't mean that nobody wants it. Take a look at the congress debate, there are plenty of people that suggest that we take a good look at our taxation now the in-game economics changed, and first wait what these changes do to our economy. Before making the populist move and lower it to 4% again with the potential of destroying the entire gov income. As our MoF stated the day after the change there was less tax income as before the change, so we still need to figure out what this change does to our economy, before we can make a good taxation based on FACTS.
@ Frankie: We are not being cowoardly. Its shows we have balls by saying that we need higher taxes. No sense in appeasing everyone by saying heres more NLG. Its like a group cattle being led to the slaughter, your screwed when its too late. Im getting tierd of DemNL doing everything to gain votes for power and try to portray us as evil corporate villains who spend your money.
Our article is not made for votes, or to gain popularity, same as your article. We both have different opinions and that is allowed isnt't it?
DemNL, prefer a active media, and we will bring the forum to ingame. The whole month, any time, and yes, even the day after a election if needed.
Do not be so angry about us voicing our arguments ingame. We do not start a 'laster' campaign about your article as well do we?
Back to on-topic, @ Luuk, or income was lower then yesterday, but higher then sunday,
Very good Artem, that is why we need to wait to see what it turns out to. Instead of doing the populist move screaming that the government is stealing your money when they take time to make a good decision. And you shouldn't say the government at all tbh, since your just generalising there.
@Luuklag, sure people want to change it now, but would they have brought it up if the tax remained at 4% like it used to be? I seriously doubt it.
Also, I agree on looking at the numbers in a month and see if the whole tax thing needs a revision, but for now we do not have facts, so it would only make sence to keep things as they used to be, meaning the income tax at 4%. Setting it at 4% doesn't actually lower the income tax, as it should be at 4% anyway. The 10% it is at now is the changed value, not the 4%.
Also, if you want a decent comparison between the old and new economic module, I suggest we put it back at 4% as well. At that percentage we can actually see the impacts of the new economic model and make sure the differences are because of that and not because of a new income tax setting. Otherwise we might as well compare apples and pears...
In my opinion the problem is NOT the tax raise (after reading your article, Andreas, I agreed 100% with you). There could indeed be too much NLG. It is worthless on the Monetary Market and Gold is getting increasingly valuable, while NLG isn't.
However, former congresses have set the tax rate at 4%. It is for new congress members to respect that decision and not to take advantage of a decision the admins made only to bring in an update. The raw tax should be at 4% first, like it should be - decided by a former congress - and then, there should be a debate.
Don't get me wrong: I actually think I could be in favor of rising our taxes in order to take money out of circulation. But this is also a matter of respecting decisions by former congresses AND being responsible to the people that elected you because they thought that you would take decisions AFTER having a debate, not before.
Raise the VAT to 99%
Your intentions are honourable, but remember some players are solely dependant upon their income through salary, and a 6 percent point cut in that will hurt them a lot. If we want to keep our younger players in the game. We have to give them a chance. The rate of the NLG is a big issue, but keep the new players out of this.
@Dimlight, don't forget that wages increased as well the last few days, so in the end there will not be to much of a difference. Before the changes wages floated around 125 NLG. With 4% tax reduced that is a netto income of: 120 NLG. Today wages are as high as 147,5, but to make calculating easy lets take 145. With a bruto income of 145, and a tax of 10% people have a netto income of 130,5 NLG. This way the people's income increased with more then 8%.
15,977 (new tax)
18,974
15,095
16,899
29,345
25,085
20,709
25,434
25,525
45,192
34,201
35,833
23,375
@Luuklag, don't forget that with a raise in wages, prices are likely to follow suit. Let's take Raw Material for food as an example. Yesterday a price of 0,33 was not uncommon, but prices climbed to 0.37 over last night. That is a rise of over 9%.
Well dimligthero, thats the same rise as net income of people, so no problem there.
Mael, if you extend that list a bit further, all values prior to that are roughly around 15k a day. The recent spike is probably because of an increased production of RAW's to get rid of the Toolboxes while we could. Meaning more RAW's being sold, so the state received more in taxes from them.
Also, the 45k and 35k numbers are extra high numbers due to some unknown donation, as stated on the sheet.
The 'keeping money out of circulation to raise the Gold rate' plan has not worked in the past. The rate still sucks, and you know it. Still, even if you think raising taxes should do the trick, there hasn't been a single proposal to raise taxes for months. Good job, former and current Ministers of Finance 😁
Broersje, it has worked in the past. In fact it worked perfectly till the last tax change, since then we have seen our MM collapse. The problem is that we need a monetary policy and not a tax policy that is based on who is in power.
What is the result of the plan, then? A better rate? I don't see that.
@ Piet Valken, that can't be true, as there was no VAT on raw materials.
@Luuklag Actually there is, the rise in prices is balanced out by the rise in wages. But that leaves the tax rise completely unregarded. You said 'don't forget that wages increased as well the last few days, so in the end there will not be to much of a difference.' earlier, but remember the wage raise doesn't measure up against both the tax increase and the increase of prices. There is no denying that this will hurt our younger players.
@ dimlighthero. It is so that the prices for raw materials has risen, but that is not true for the prices of products. Q5 weapons and Q5 food are still as expensive as they were.
Yes and Q1 weapons and Q1 food prices have plummeted.... So?
It will only take a while until economy restabilises, at that point everything will be back to the way it was before. That's the nature of the beast. So what is the government plan for that moment, raise the taxes some more?
I'm also curious what the government plans to do with the growing amount of money they are raking in through increased taxes? There are precious few ways to spend it without bringing the money back in e-NL economy. So will e-NL eventually be stinking rich while its citizens struggle because of high taxes? Any thoughts about that?
It seems that some countries have a very strong economy and aren't bothered much by inflation. Have anyone of the 'economists' looked into what actions these countries take to keep monetary value at an acceptable rate?
still you need to get it endorsed by congress no matter what