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[House Proposal] May Budget
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Andoversr

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Joined: 08/03/2013 03:06:43
Messages: 139
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Lets get things rolling on the may budget!

First of a summary so far of the April financials:

Right now we about 1/3 of what the government is spending on bonus's, this is down compared to last month's financials but not good enough yet


Proposal:

Sales tax (all goods) from 0.05 GBP to .25 GBP
Import Tax (all goods) from 0.05 gold to .1 gold
Import Tax (Weapons) from 0.05 gold to 1 gold
Export tax (all goods) from 0.01 gold to 0.05 gold
Personal Income tax from 10% to 15%
Currency exchange tax from 2% to 5%



Thoughts?

HOC Participation:

Andover: Discuss and vote x2
Lancelor: Discuss and vote x1
Karlonia: Discuss and vote x1
Morgan: Discuss only
Netvalar: Discuss and vote x1
TheOnlyKazm: Discuss and vote x1

Total Voting power: 6
Needed for passage: 4

This message was edited 2 times. Last update was at 03/05/2013 05:43:37

Netvalar

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Joined: 27/03/2013 07:09:43
Messages: 61
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I really want to see some discussion 1st myself
Karlonia

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Joined: 15/03/2013 19:35:51
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Location: Corpus Christi, Texas USA
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There are several things to address here.

Sales taxes: Normally I favor sales/consumption taxes over income taxes, but the game seems to be calculating them in an unusual fashion. Sales taxes are typically assessed as a percentage of the purchase price of an item, but currently the .05 GBP is being added to the prices of all items as a flat rate rather than a percentage. This is most noticeable with relatively small purchases (less than 1 GBP) but the tax is practically negligible for larger purchases such as weapons or machines. If we raise the rate to .25 GBP this would wreak havoc with small purchases such as iron, where the price per unit is often around 1 GBP or sometimes less. This is especially important currently, as the city of London seems to have no more iron that can be mined until the beginning of May, which means that steel companies like mine must purchase iron from the market in order to continue production. Increasing the cost of iron with disproportionately high rates on this type of purchase will tend to discourage steel production, which in turn will discourage production of things that require steel such as weapons.

This type of tax really needs to be assessed as a percentage rather than a flat rate. If the tax was five percent instead of .05 GBP, this would actually raise more funds for the treasury because larger purchases such as weapons and machines would yield much more tax revenue than the relatively paltry .05 GBP that they do currently, while iron purchases of approximately 1 GBP per unit would be almost unaffected. I do not know if it is possible to set sales taxes as a percentage or not, but if so this is something that should be considered. If not, this point needs to be raised with the Admin as a suggested feature/modification for future game versions.

Import taxes: I can generally go along with this, as it tends to discourage "dumping" of foreign goods on UK markets and may also raise more money for the treasury.

Income and currency exchange taxes: This one warrants some caution, as it has the potential to affect overall game activity and migration patterns. Earning wages from normal work and performing currency exchanges are things that practically all players must do in the course of the game, so increasing taxes in these areas may cause players to leave the UK and move to countries with lower income/exchange taxes. Other players may become discouraged by the overall level of taxes/expenses incurred as opposed to how much income they can earn during the normal course of gameplay, decide that it is simply not worth it, and leave the game altogether. As I mentioned in another post, the level of activity in the UK has already fallen so low that I cannot keep my companies running continuously because of poor sales volume/not enough money for wages, and when I do post new jobs, it often takes hours for the workplaces to be filled and for production to actually occur. Increasing taxes on income runs the risk of slowing things down even further and causing more people to lose interest in the game.

Other suggestions/questions: I noticed that the UK has over 1300 gold in the treasury. Is it possible to convert some of this to GBP to help balance GBP revenues vs. expenses?

I am also curious to find out how other countries are handling their budgets, particularly the ones with significant populations such as Romania and Hungary. Are these countries also running deficits, and if so, are they actually doing anything about it? How do their taxes compare to ours in the UK -- do they seem to be higher or lower overall?

Finally, what exactly happens if the budgets are never balanced and the treasury runs out of GBP, or even runs out of money altogether? Do things like fight bonuses and work bonuses stop being paid until there is money in the treasury again? Does the game have any specific rules or provisions for bankruptcy of a country/government? Is it possible to have deficit spending by issuing bonds, creating new currency, or other "quantitative easing" measures like governments are prone to do in real life?

I have always been curious about many of these finance-related issues but I have not yet seen any tutorial or guide that really addresses any of this stuff, nor have I seen any discussion about it from Admin. I suppose this is another one of those things that will be improved upon and explained in greater detail as we progress through later versions of the game.

This message was edited 1 time. Last update was at 17/04/2013 04:02:27

Netvalar

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Joined: 27/03/2013 07:09:43
Messages: 61
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I think after karlonia's post what we really need to do is look at sales tax in seperate types. For the month of May leave tax on materials where they are, thus not overly affecting the cost to produce retail products. Now food and drink will continue to rise in needs so even a small raise there will help instead of all the way to 0.25 I suggest only doubling these 0.1. Now the other end of the spectrum are the more expensive items (machines no no no shut up Luke) Houses, Transportion, Machines and raising these taxes to a full GBP should more then make up for those taxes not raised as high as suggested.




Materials Tax - No change
Food/Drink Tax - From 0.05 to 0.10
House.Transportation Tax - From 0.05 to 1.00
Fighting tax (armor/weapons) - From 0.05 to 0.25
Machines tax - From 0.05 to 1.00
Clothing/Equipment tax - From 0.05 to 0.25

This message was edited 1 time. Last update was at 18/04/2013 23:47:43

Netvalar

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Joined: 27/03/2013 07:09:43
Messages: 61
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Just completed make 3 new proposals

[House Proposal] UK Bank
[House Proposal] Sales Tax Separations
[House Proposal] May Bonus

Though they will affect the May Budget they really don't affect this specific proposal and thus aren't actually amendments. I'll wait to see if we get further discussion on this proposal today and then tomorrow if need be suggest a couple of amendments. We have only 1 week to get the budget finalized based on the timeline we agreed to last month.
Netvalar

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Joined: 27/03/2013 07:09:43
Messages: 61
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Karlonia wrote:

Finally, what exactly happens if the budgets are never balanced and the treasury runs out of GBP, or even runs out of money altogether? Do things like fight bonuses and work bonuses stop being paid until there is money in the treasury again? Does the game have any specific rules or provisions for bankruptcy of a country/government? Is it possible to have deficit spending by issuing bonds, creating new currency, or other "quantitative easing" measures like governments are prone to do in real life?

I have always been curious about many of these finance-related issues but I have not yet seen any tutorial or guide that really addresses any of this stuff, nor have I seen any discussion about it from Admin. I suppose this is another one of those things that will be improved upon and explained in greater detail as we progress through later versions of the game.


I believe if we run out of GBP in the countries coffers then we have to produce more GBP which would of the net result of lowering the value of our money. This would make our products more expensive compared to other countries and our income/bonus less compared to other countries. So we need to have a balanced budget then work towards a positive budget so that we can increase bonus and lower citizen taxes thus drawing more players to our country. Very complicated and working on the budget from month to month very slow but any quicker then that and we have a greater chance of making big mistakes.
Netvalar

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Joined: 27/03/2013 07:09:43
Messages: 61
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Suggested Amendment for this proposal [Amendment to] May Budget (http://forum.goldenbattles.com/forum/posts/list/143.page)I believe if this amendment is passed then the May budget should pass as well, since IMO it makes sense for the month of May and we can see where we stand for any other changes for the month of June.
 
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