Raise Import Taxes by 5-10% - Protect our eCanadians
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by Michael 23
I would propose raising our import taxes at least to a modest 5% but hopefully to as high as 10%. I look forward to congress to perhaps debate the topic this term but I thought I would propose it now.
Many eCanadians are complaining about the dumping of products on the eCanadian marketplace and particularly weapons at least from what I've seen, and I thought to write a short article and easy read to at least highlight some of the points I've come to understand. Hopefully, these topics will be debated in congress and a decision finally made.
The Points in Favor of Import Taxes:
Our eCanadians are having a harder time selling their products and they’re the ones that hire, produce and fight for eCanada. They also fund our economy for our WRM and FRM which is a key industry for newer players. They deserve to earn money for the products they produce.
Most countries in eRep have import taxes. Countries with full bonuses have import taxes as high as 99% while other countries range from a modest 5% to higher figures like 35%, 50% and so on. Even our allies have import taxes. For details and an overview check erep stats.
A 5-10% import tax would not significantly curb imports but would perhaps prevent dumping to a certain extent. Furthermore, given our VAT of 10%, a 5-10 % import tax could help us raise money from foreigners instead of just raising our VAT to tax both eCanadians and foreigners. Import taxes make it worthwhile for us to tax the abundant resource producing foreigners instead of just our eCanadians.
While a 1% import tax does allow for cheaper products it significantly harms our producers when they face dumping and yet they have to pay for wages and WRM and FRM that they most likely buy in eCanada. Foreign producers fund their own citizens and their own WRM and FRM industries that support their newer players.
An import tax is favored by many players from what I’ve seen, particularly for weapons, and as such reflects our collective views. As these are our collective views, they should be put into effect by our government for eCanada. I'll leave this open for debate to congress but I'm sure many would favor import taxes of at least 5%.
Based on the points mentioned, I would favor an increase in import taxes as I'm sure some other players would as well. As I explained, I didn't want to write a detailed laborious article but one to the point. I hope we do implement import taxes at least as low as 5% and I look forward to congress' deliberation on these topics this term.
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On the other hand, cheap weapons are good for eCanada military.
Import taxes should remain lower than 5%, and the sum of VAT and Import tax, for products, should remain lower than 15% at all times.
http://www.erepublik.com/en/country/economy/USA
Thanks for comments Spock but I disagree after seeing all of the complaints by players due to dumping. I would favor import taxes of 5% but everything has to be deliberated by congress and this is exactly why I thought to raise the issue before this term.
I would agree that the combination of VAT and import taxes of 15% is reasonable to still attract imports while possibly curbing dumping.
The eUS doesn't have full bonuses though Spock but it is a good point.
Dumping?
There is no dumping.
The Q4-Q7 weapons are sold at a fair price. If I was a weapon seller, I would sell my weapons in eUSA but not in eCanada, because of the low VAT and low Import Tax. The VAT is quite high in eCanada for an International seller.
And Q1-Q3 are not profitable anywhere. Producing Q1-Q3 weapons is stupid. These weapons are doomed by the game mechanics. You're better dissolve these Q1-Q3 companies and buy WRM companies instead.
Another thing.
A High VAT increases the lifetime of market offers having a too low price.
When the VAT is low, you can buy these bargain offers, resell them at a higher price and make a profit. This stabilizes the market, like in the eUSA.
With a high VAT, you can't!
I'm in favour of raising import taxes to 2%. I don't think this will scare off current importers and will give us a bit more money for MPPs and MU funding and let Canadian sellers earn a little more in theory.
I am in favour of raising the tax, but I am more in favour of making sure it is the right thing to do. If you propose raising it, I want measureable results published.
Questions: Did it help or hinder Canadian producers, Candian consumers and the Canadian? What do you propose to measure, how will you measure it, who will track it, and how will you decipher the results and recommend if it should go back to it's original amount, lowered or raised even more. I look forward to your answers.
Should have said and the Canadian government revenues?
stupid PLATO.
We need trade embargoes rather than higher import taxes.
I agree with Donna Rush.
Yeah, embargoes would help. If our allies can make money selling to us at cheaper prices than Canadian producers can make their products, I see that as a win-win: lower prices for consumers, which helps our war efforts, and the money doesn't go into the wallets of our enemy, where it would be used, eventually, to fight against us.
Have you done the math on this, Michael? Can you prove that a 5% to 10% import tax increase won't significantly curb imports?
@Chochi I haven't done the math yet and I don't think a 5% import tax would significantly curb imports but I think it's enough for us to make more money on individuals who dump. I also agree with Donna Rush in that we should have embargoes as the Poles have dumped a lot on our markets.
@the Grinch It's a lot to answer in a comment box but we could definitely look at both our eCanadian price and gauge whether it's significantly higher than the eAmerican price as they don't have import taxes.
We could also look at the quantity of weapons per day placed on the market by foreigners or by non-citizens of eCanada and measure the overall impact they're having on our market due to earlier complaints like 600 or 400 tanks being dumped on the market. By gauging these two measures we could determine how import taxes are impacting our consumers and producers. We could say that a significantly higher price for Q6 and Q7 tanks may be hurting our consumers while extremely low prices and high
quantities of imported products are hurting our producers. We could also look at the prices of our WRMs and see if they recuperate a bit along with wages due to higher prices by our eCanadians and see how they're supporting the newer eCanadian citizens. If congress decides to raise import taxes I'm willing to track these various prices and quantities and see the immediate impact or for a month but I think it would be redundant to possibly keep tracking them forever.
So any idea if CPF stands behind this adjustment you propose, Michael? EPIC was founded with the aim of allowing every member and independent and equal voice in the party. Nothing really wrong with this because that's the reality of how politics are usually conducted~it's more grassroots than supported by the party as a whole
Does CPF function from a grassroots method of allowing all members an equal voice or is there a party-line and set of policy to follow?
Does yours fit that policy?
@ Plugson I really don't know if the CPF stands behind this proposal - I'm not really forcing the issue on anyone I just thought to write an article after guys in the MU and in other places complained about the dumping of products on the eCan marketplace talking about 600 Q6 or Q7 weapons holding up the market and after realizing the full extent of the damage.
Does the CPF have a set policy on anything right now? There has been a change over in leadership, the former party brain trust has sorta scattered and done their own thing. Yourself included Plugson. Wuz up Randall? Seriously...
I do believe we have an equal voice in the CPF as well but that we still have to follow the 7 tenets of the CPF and that we still have to debate on issues whether amongst the party and amongst the congress members as well. I don't think my article really follows any sort of set policy but then I wasn't aware of any set policy restricting us from raising awarness about issues. Either way, it's really great to hear from you guys on these topics as it always gives a better idea of where some stand.
That's okay. I wasn't sure if this was a Congress platform article or one meant to just open up debate, like the one Homer is doing with MU funding. It's good as a debate article but I thought that if you wanted to make this a Congress proposal, then it'd be good to get CPF behind it somehow. These days we can't vote for the individual and have to choose the party as a whole so it seems to me that EPIC-like approaches to Congress have less effect than before.
Quimbie ~ 7 Tenets is too many.
I'm trying to narrow it down to The Big 3 and make them colour-coded
Red - fiscal policy~staying out of the red and in the black
Blue - domestic programs~assisting new players and supporting MUs
Green - military aims/MPPs~providing meaning Battle Orders and a healthy stack of MPPs
still thinking on it
I get that Plugson. I am on a similar journey. My question, though, was really aimed at the current CPF leadership, who, frankly, haven't been all that loud lately. This is an interesting period in eCan history. The parties are all a bit of a mess. Fun to watch.
CPF had it's shot to make it big in the last 2 months and now that time has passed. Time to reassess and re-organize with a new approach. As the rivers flows, ya know...
Trying to decide if "Float On" by Modest Mouse
http://www.youtube.com/watch?v=CTAud5O7Qqk
or if "Boredom and Joy" would make a better theme for the article
http://www.youtube.com/watch?v=H6IAueT8ghU
For what it's worth, I am listening to Motorhead's 'Die you bast*rd!'
Oh, and I'd go with "Float On".
Nothing we can do with tax's will fix a broken economic module. I know it is the only thing we can debate but it really makes very little difference.
Prices are 99% of the time exactly the same on raw and our weapons prices tend to a little higher. So once again we are trying to fix a problem of dumping that does not exist.
Our tax's go up and down like a yo-yo if there was a magic formula we would of found it by now.
As a business man I prefer less yo- yo and more consistency.
eRep is an International economic model, local/National initiatives have very little sustained effect. Gold rules. If MU funding is an eCan priority, the tax rates have to be such that there is enough in the bank to pay for them. This notion that there is a tax rate that'll magically fix the eCan economy is bollocks.
agree whole heartedly michael, voted!
If we cannot affect the prices on the market, as a few are saying here, then jack all the Import Taxes as high as they will go. That way we collect more tax from foreign players and allow eCanadians to sell on the market exclusively if these foreigners decide not to sell here.
However, I do think Import Taxes do affect the price of Weapons, for sure.
If it were more difficult to by and sell foreign goods and economies were better able to nationalize, then ya, our economic decisions might matter, but right now it's a global free-for-all.
Our decisions do matter even if what you say is true, Quimbie. Changing import taxes does have a possible effect.
The Govt would have a good source of revenue from foreigners OR it would be giving local players an edge over foreigners selling on the market.
Maybe we can't control prices but we can affect who sells here and how much we get from foreign players.
Or, prices do change when import taxes go up and then newer/regular/clicker players pay more while the better established players earn more profit.
I guess we'd have to tinker with the tax rate to determine if Import Taxes do affect revenue and prices. We already know that 10% VAT drops revenue. Not sure what it did to prices.
It dropped prices, and not just because all prices around the world dropped.
But when wages are higher and market prices cheaper elsewhere, it is too easy for the average citizen to work and shop elsewher. Unless there are punishments for being an international citizen, then the larger global economies are going to be better able to attract workers and buyers. I can make more money and spend less money in a large economy like ePoland. It's all numbers game really.
Yeah, it is a numbers game but not many do the grind of gathering all the numbers and pushing them through a set of calculations. But we do enjoy discussing the hypotheticals and percentages (of an unknown number) anyhow.
Plugson if you raise import tax's to high you get zero income from them.. They need to be low enough that someone would actually pay them to have any income. If our domestic prices rise above the world market I pay $20.00 and buy on the eAmerican market. I don't even need to move back for any reason. There is only one market now with all the currencies being the same. Any thought you can create an economic island is false.
Domestic prices are really about the VAT. We need a 10% VAT if you want Canadians to shop here.
But, we're planning a 15% VAT.
So assuming 15% VAT.
Now for an import rate of:
5% - combined foreign rate of 20.75%
6% - CPR 21.9%
10% - 26.5%
11% - 27.65%
Now using this if we raise the import rate to 5 or 6% then our company owners will need to be making 5.75-6.19% more than foreign companies.
This means that a 5-6 % import tax is completely reasonable. Company owners will possibly make 5-6% more. And if they make less than that then the import tax will protect the Canadian economy. It keeps the economy in check.
Now the problem is the 15% VAT rate. That may encourage Canadian citizens to purchase stuff from foreign or the black market.
"Now the problem is the 15% VAT rate. That may encourage Canadian citizens to purchase stuff from foreign or the black market. "
Vrai!
Remember the whole theory of the high VAT and low income tax system was the bot was the major purchaser on our market. We were basically getting the money from Plato.
Ooh, hot topic! Good work Michael!
This is where taxes get fun. Our market has a low moving average compared to some other markets out there. What you need is import taxes set as a percentage of the difference between our market average low and the market of our largest allies. For example, if product A sells for 10cc here, and 9cc in USA, that's a difference of 10%, so an Import of 5% will be more profitable for us and still be enticing to foreign suppliers. Just need someone to do the math.
Of course, as has been previously stated, a high VAT fucks it all up. There's a complex formula about compound taxation that I might take the time to explain some day. That will hopefully convince the pro-high-VAT supporters of the dangers of what they propose.
I agree with everyone who's posted against a 15% VAT - I'm actually against any VAT higher than 10% and was basing my model of import taxes on a VAT of 10%. I think a VAT of 15% is too high and discouraging to producers pushing some to sell less or lower wages or pushing some to sell on the grey market. I think a VAT of 10% is reasonable and encouraging to producers. The bottom line with a high VAT is it hurts our producers and the primary wages and WRM markets that newer players depend on.
Thanks Uncorporated for the compliments on the article.
Either way, I'll leave the VAT debate up to congress as well as the debate for import taxes. I'm sure congress will make a good decision and that there will be lots of debating to do within the CPF, amongst other parties and congress.
I like the comments - you guys really brought the discussion.
15 % import or bust.
5/10 % import taxes are ok, 15% VAT no. Already having a hard time selling on local market, of Vat go higher ill just produce what i need and stop the rest.
keep VAT at 10% an slightly raise import tax
At current prices, even though we have a VAT of 10% and the eUS a VAT of 5%, due to the lower prices in the eUSA, producers get about the same in eCanada as they do in eUSA. If we raise VAT to 15% we will make it less appealing not only to foreigners but also to eCanadians. With a 5% import tax and VAT of 10% we make the market less appealing to foreigners only and only by about the 5% or 0.70 CC on Q7 tanks and 0.30 CC on Q6 tanks. So, technically we can reduce the huge drops of foreign tanks.