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Proposal to fix the issue of taxation in NS

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Azurius
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Proposal to fix the issue of taxation in NS

Postby Azurius » Thu Nov 16, 2017 5:29 pm

I am pretty sure we can all agree that currently one of the biggest issues of NS is in fact the very unrealistic taxation system... While it is next to impossible to add other forms of taxation such as consumer taxes to the game, especially with aaaall these issues we already have and increasing... I think we should at least fix the income tax rate to be somewhat proper.

I thought about it and I propose a really simple solution for that:

Base a nations income tax on a nations government spendings in percentage. While probably still not perfect this would be much MUCH better and accurate. This would also be easy to implement code wise, since all you would need to do is tie taxation rate to the actual government spending in percent.

For example, my nation currently has a 100% tax rate lol. Yet, government services only make up for 26.1% of my nations GDP right now. Which is also what my effective tax rate should be, 26.1%. Why? Well because that is what my nation effectively spends on ALL public services in total(including those 2 "hidden ones" which would be administration and spirituality, the later being 0 in my case lol), and hence should be the effective tax rate of a nation. Also obviously this includes the salaries for people working in these public services too, since it is INCOME tax after all(and what your nation taxes in percent is already calculated into the average income per person working in these public services). This would also fix the problem vice versa too: I have seen nations with a 0% tax rate that somehow strangely have like 11% or so of their GDP being public, governmental services. Clearly something is wrong here once again that should be fixed.

Anything else currently makes no logical sense at all. Since that is what a nation spends on public services and hence should be their rate of taxation. Especially also when things like a black market are strangely absent like in my case. So ask yourself... Or let me try to explain it easier...

Income tax rate is 100% but total spendings on public services are only 26.1%. 100 - 26.1 = 73.9%

So tell me... WHERE on earth do these other 73.9% go....? No it can´t be the black market either as this as said is strangely enough absent. It can´t be income either as this is directly tied to average income and hence earnings of those working in these public services too(i.e. the average income per person working in any public sector, for example public transport. Currently mine is at 6.512 right now. Which covers both the income those people make working in this area, as well as the 5.8% of my total public spendings, which in total make up 26.1% of my GDP and income for all public services together). So yeah, where do these other 73.9% go....?

As of such the easiest way would be to simply tie a nations taxation to what they spend on public/government services. That is my proposed solution. As said this wouldn´t be hard to mathematically code either, since you already have effective codes running for things such as income, percentage of GDP as well as a good black market rating too.

That is the only viable solution I can think of that is not only easy but also prevents highly complicated coding and maths to induce an at least somewhat proper tax system in this game. All you would need to do is somehow adjust the freedom of taxation rate to this. Which I guess wouldn´t be too hard now would it? Or actually probably you won´t even have to do that either, since taxation is already tied to freedom of taxation(if my assumption is correct), and taxation itself would now simply be tied to your government spending in % of your GDP. Problem solved and we would finally have a far more realistic taxation system.

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Fauxia
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Postby Fauxia » Thu Nov 16, 2017 6:20 pm

The problem is that income tax is not the only source of government income, nor is income (as in payment for jobs) the only way for people to get money. I may have a 100% income tax rate, but my other taxes are basically nonexistent, and my welfare system goves money back to the people.
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Azurius
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Postby Azurius » Thu Nov 16, 2017 6:55 pm

Fauxia wrote:The problem is that income tax is not the only source of government income, nor is income (as in payment for jobs) the only way for people to get money. I may have a 100% income tax rate, but my other taxes are basically nonexistent, and my welfare system goves money back to the people.


I already adressed that somewhere else... Adding complexer taxation to this game is simply an next to impossible task.

Actually in the end pretty much every form of taxation gives money back to the people in form of jobs and income that is connected to that, as well as public services in itself such as education, transport, welfare, environment etc. The only exception would maybe be religion... But then again religious people would argue they serve the nation moraly/spirituality. Well and obviously foreign aid as you give to other nations here, then again even foreign aid workers need some form of income for doing their jobs, so at least a little flows back to your people automatically even if it is not much. Those things all are not the issue here however.

If you want to add other forms of tax this is the wrong thread for you. As this one aims to fix our current income tax system.

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Fauxia
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Postby Fauxia » Thu Nov 16, 2017 8:13 pm

My point is that your idea does not work, not that we have to add other taxation forms. The simulation tries to be accurate, and yours isn’t

The taxation is personal, not corporate. So a trickle-down country might have 20% consumption but 40% taxation. That’s an accurate simulation

Also, the people might be getting stuff, but they didn’t choose to get them, therefore it can’t count as income. Would you like it if a corporation gave you healthcare as part of your salary and counted it as your income? I doubt it. Therefore you can’t make government goods and services that way
Last edited by Fauxia on Thu Nov 16, 2017 8:16 pm, edited 2 times in total.
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Azurius
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Postby Azurius » Thu Nov 16, 2017 8:40 pm

Fauxia wrote:My point is that your idea does not work, not that we have to add other taxation forms. The simulation tries to be accurate, and yours isn’t

The taxation is personal, not corporate. So a trickle-down country might have 20% consumption but 40% taxation. That’s an accurate simulation

Also, the people might be getting stuff, but they didn’t choose to get them, therefore it can’t count as income. Would you like it if a corporation gave you healthcare as part of your salary and counted it as your income? I doubt it. Therefore you can’t make government goods and services that way


Okay... Then tell me how exactly the current system is more accurate then what I propose? Once again where do these missing 73.9% go...? What happens to them? Once again no it´s not a blackmarket either. Also how come nations can have governmental, non private, services if their tax rate is literaly 0%...?

Seems highly unrealistic to me. Seems to me that the current system is exactly the problem as it is not working at all in neither direction, lacking any accuracy or realism for that matter.

Once again this goes into other forms of taxation and I am not here to discuss that as this not the point of my proposal nor this thread *sigh*....

Yes it does. When you work as a teacher at a public school for example, you get income, income that is based on taxes. That is why NS adds income of public services to your total GDP/actual average income. And now we go into a discussion of capitalism vs. socialism which is not only totally off topic but also once again not the point of this thread or proposal. Besides, actually many corporations do that these days already.

Also if that is your issue: Well of course income tax is personal. That is the whole concept of income tax.... If you want it private you run things like that via private means. I.e. private healthcare, school, no welfare etc. resulting in very low or no taxes at all. But don´t expect to have any governmental/public services in this case. As it neither makes sense, nor is realistic, nor is accurate either. It is plain BS for a nation that has a 0% tax rate and runs on private means to have any governmental/public services at all. Just like it is BS for nation like mine to have a 100% tax rate when no blackmarket/extreme corruption exists, and only 26.1% of my GDP stems from actual public services.

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Bears Armed
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Postby Bears Armed » Sun Nov 19, 2017 6:04 am

Azurius wrote:Once again where do these missing 73.9% go...?
:eyebrow:
They go into your politicians' Manamanian bank accounts, of course...

:p
Last edited by Bears Armed on Sun Nov 19, 2017 6:04 am, edited 1 time in total.
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Fauxia
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Postby Fauxia » Sun Nov 19, 2017 7:11 am

What you are trying to do is say that whenencer I bring up other forms of taxation, you think I want a stat. This is not correct, but you are ignoring that government’s do have other types of taxes than personal income taxes. Clearly, your nation doesn’t have a high business tax, as your industry is still noticeable. Personal income tax isn’t the largest source of government consumption, but since its what people will really care about, it is the taxation stat
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Azurius
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Postby Azurius » Mon Nov 20, 2017 12:38 pm

Bears Armed wrote:
Azurius wrote:Once again where do these missing 73.9% go...?
:eyebrow:
They go into your politicians' Manamanian bank accounts, of course...

:p


Yup that´s why there are such huge wealthgaps and rampant blackmarket activities ;)

Fauxia wrote:What you are trying to do is say that whenencer I bring up other forms of taxation, you think I want a stat. This is not correct, but you are ignoring that government’s do have other types of taxes than personal income taxes. Clearly, your nation doesn’t have a high business tax, as your industry is still noticeable. Personal income tax isn’t the largest source of government consumption, but since its what people will really care about, it is the taxation stat


I know that, however we don´t have these other forms of tax in this game. Also even so... it is at freaking 100% lol. Which again destroys pretty much any sense even if you would just think of having industry and other forms of tax as well.

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Fauxia
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Postby Fauxia » Mon Nov 20, 2017 2:24 pm

Just because there isn’t a stat doesn’t mean we don’t have it
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Azurius
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Postby Azurius » Mon Nov 20, 2017 3:31 pm

Fauxia wrote:Just because there isn’t a stat doesn’t mean we don’t have it


We don´t for that matter. Because if that was the case, I and other nations wouldn´t have a 100% income tax to begin with. Since 100% of all income is taxed already, there is literally nothing left to tax any industry on either, nor is there technically speaking any money for people to keep the industries afloat by purchasing.

It is not only plain unrealistic, it can´t be the case either. Besides if it were, I would have to 99,9% already found a gap in income/effects, as I not only document every issue option and the effects it has for me, I also do a lot of math and calculations. For example I can tell you that there is another invisible source of income you don´t see in NS stat system(besides tourism): And that is administration. You don´t have a stat for that(it only shows as spending in % of your public services), and I can instantly tell you when income from that goes up or down. NS simply does not have any hidden tax systems such as consumer or industry tax.

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Postby Green Fauxia » Mon Nov 20, 2017 3:35 pm

Azurius wrote:
Fauxia wrote:Just because there isn’t a stat doesn’t mean we don’t have it


We don´t for that matter. Because if that was the case, I and other nations wouldn´t have a 100% income tax to begin with. Since 100% of all income is taxed already, there is literally nothing left to tax any industry on either, nor is there technically speaking any money for people to keep the industries afloat by purchasing.
Incorrect. It is a personal income tax. A corporate tax might be 0%. Furthermore, if you have a welfare system, there could be money spent with that.

It is not only plain unrealistic, it can´t be the case either. Besides if it were, I would have to 99,9% already found a gap in income/effects, as I not only document every issue option and the effects it has for me, I also do a lot of math and calculations. For example I can tell you that there is another invisible source of income you don´t see in NS stat system(besides tourism): And that is administration. You don´t have a stat for that(it only shows as spending in % of your public services), and I can instantly tell you when income from that goes up or down. NS simply does not have any hidden tax systems such as consumer or industry tax.
There are flags. I’m surious how you came to these calculations

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Azurius
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Postby Azurius » Mon Nov 20, 2017 3:47 pm

Green Fauxia wrote:
Azurius wrote:
We don´t for that matter. Because if that was the case, I and other nations wouldn´t have a 100% income tax to begin with. Since 100% of all income is taxed already, there is literally nothing left to tax any industry on either, nor is there technically speaking any money for people to keep the industries afloat by purchasing.
Incorrect. It is a personal income tax. A corporate tax might be 0%. Furthermore, if you have a welfare system, there could be money spent with that.

It is not only plain unrealistic, it can´t be the case either. Besides if it were, I would have to 99,9% already found a gap in income/effects, as I not only document every issue option and the effects it has for me, I also do a lot of math and calculations. For example I can tell you that there is another invisible source of income you don´t see in NS stat system(besides tourism): And that is administration. You don´t have a stat for that(it only shows as spending in % of your public services), and I can instantly tell you when income from that goes up or down. NS simply does not have any hidden tax systems such as consumer or industry tax.
There are flags. I’m surious how you came to these calculations


Well kay maybe, but what about nations that have a 100% tax rate and 0 welfare...? Those exist too you know. For one. For another, there is still no gap in effects and income to attest for any kind of corporate or consumer tax. If so it would show up as inconsistencies in rising or falling average income, but alas neither in my nation nor any other nation I saw this is the case. So that NS has other forms of hidden tax can effectively be ruled out.

I came to it because I for literaly years regularly not only documented effects, even before I could just copy and paste them which frankly was a lot of work... I also mathed up things hundreds of times, and an inconsistency in form of a hidden corporate or consumer tax simply doesn´t exist. If there did there would have been clearly off results in my math, but alas there weren´t, it fitted perfectly.

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Postby Athretvari » Mon Nov 20, 2017 5:21 pm

A good way to look at it (especially since your economy is made up of government and state-owned industry) is to consider what NS calls “Effective Tax Rate” as the sum of all taxes and fees your people pay for goods and services from BOTH government and state-owned industries.

Example, a road toll is technically a tax-fee paid by only those people driving through/pass the toll. Imagine a bus ride in your country technically cost zero, but there is a “distance utilitization fee/tax” based on how far your ride the bus. Imagine walking into a supermarket where everything is technically free, but there is also a “per kilogram of fruit fee” etc.

Basically the rest of the “taxes” you collect but dont go directly to govt, instead go to pay for the “free” stuff your state-owned industries produce.

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Azurius
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Postby Azurius » Mon Nov 20, 2017 11:57 pm

Athretvari wrote:A good way to look at it (especially since your economy is made up of government and state-owned industry) is to consider what NS calls “Effective Tax Rate” as the sum of all taxes and fees your people pay for goods and services from BOTH government and state-owned industries.

Example, a road toll is technically a tax-fee paid by only those people driving through/pass the toll. Imagine a bus ride in your country technically cost zero, but there is a “distance utilitization fee/tax” based on how far your ride the bus. Imagine walking into a supermarket where everything is technically free, but there is also a “per kilogram of fruit fee” etc.

Basically the rest of the “taxes” you collect but dont go directly to govt, instead go to pay for the “free” stuff your state-owned industries produce.


Okay that is at least a way to look at it, but still doesn´t fix the inherently flawed tax system. If you look at my charts(due to an change of effects in wording and an issue option lol) I ended up with completely private and government industry timewise. My economic freedom was also high and timewise my nation was effectively capitalist. Despite that, my income tax rate was still 100% :eyebrow: Also, as said you still have the problem of those nations with 100% tax rates but no welfare at all... The income tax system of this game remains faulty and flawed no matter what.

Another issue is, that it makes little sense for an state owned industry to rely on any form of taxation. Thing is, they don´t really do so in realife. State owned industries usually bring in profit and revenue, effectively actually LOWERING income or also other forms of taxes, as the state not only can provide for these services itself, it can also bring in revenue from it. For example: Housing. People renting state owned houses will still have to pay rent. That rent directly goes into the nations wallet. It not only pays for all maintenance and workers fees, but actually rakes in revenue at the same time. Even if that might be lower then what you get from purely private, as purely private only aims to maximize personal gains(with detrimental effects to the states revenue and household, and the people and their well being who are ruthlessly exploited through it). This is the big dilemma you see in Germany for example, especially Berlin. We privatized our elecricity, public transport, nearly all of our social housing etc. The state of Berlin sold them to private biders. So far so good as it brings in an instant cash boost, but in the long run it ruined our economy and household, as in the long run the state misses on important profits. Hence the income and also consumer tax rates were increased to make up for exactly that gap. With detrimental effects to the middle to lower class households who now struggle to make ends meet, which also effectively lowered our purchasing power which led to more and more business going bankrupt here. Because the average person simply doesn´t have the money anymore to spend and consume like they could in the past. The few benefiting are the few private houseowners. The ones suffering from it are the people as well as various industries and branches of business as the average person simply cannot afford to spend that much anymore.

Anyway, the point is: State owned companies traditionaly don´t rely on tax, nor need them. Nationstates reflects that pretty well to some degree too. To actually take exactly the issue you cited as example(for whom the road tolls):

Government-state economies like mine now have a new option(while lacking the old capitalist one...): And that is to have state owned instead of private tolls on roads. Doing that: You see no boost to any economy, the opposite: Automobile industry drops(like with the same option in the capitalist version, only difference: The capitalist version boosts all other industries lol). However, what that state owned tolls do is: Massively lower taxes! Well makes perfect sense, the state now rakes in good money in form of tolls, so the overall tax rate can go down. Even NS so far lives out the fact that state owned companies don´t rely on taxes, actually the opposite, they rake in money for the state to actually lower tax rates.

This is another reason(the 3rd so far) why this whole system makes no sense. Even if I try to apply that logic of yours which is a good idea. However the NS tax system once again doesn´t reflect that. And once again is too flawed to reflect that. So once again from both realism and mechanics/maths, it would remain to make the most sense to simply tie a nations income tax to a nations public spending in %. That way, your idea in fact could still effectively be reflected, it won´t change that. It would only make the rest more realistic and reliable(which is the main point in the first place and why I made this thread lol). And fix the flaws of nations with no welfare but 100% income tax for example, huge amounts of state owned industry but 100% income tax, capitalist nations(purely private and government, no state owned) with 100% income tax rates etc. All this would be finally fixed.

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[violet]
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Postby [violet] » Tue Nov 21, 2017 8:45 pm

I do agree that we could improve the tax model! And things can get especially weird at the extremes, like your nation of 100% income tax but relatively small government.

We do already use government % of GDP as a major factor in calculating tax rates. But other factors can influence it as well. In real life, nations don't display a neat match between tax rate and government % of GDP; for example, Kuwait is 54% government with a 1% tax rate, while Macau is 19% government with a 33% tax rate.

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Azurius
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Postby Azurius » Fri Nov 24, 2017 12:03 pm

A lot of things indeed get weird with with larger or especially more extreme nations.

Hmm well true, that then begs the question how you would exactly fix the tax system effectively. The graph sadly also ignores consumer taxes on products or services purchased which would explain the disparities of some nations such as Timor-Leste that has a huge tax burden of 61.5% but actually low corporate and income tax. I would wager the consumer tax rate of Timor-Leste is high or very high.

In this case the only quick fix I see is that one could maybe tie the the government % of GDP closer to the actual tax rate then already. Though in the end it would probably nonetheless run into extremes at some point. Otherwise to really fix the tax rate it would be inevitable to add at least 2 or best all 3 other measures of tax to the game. I.e. tarrif rates, corporate taxes and consumer taxes.

That would literally be a mammoth task to accomplish however as sooo many factors would affect it and have to be added... Tariffs would be tied to all exports and especially tourism, consumer taxes depend on industrial output a lot etc. etc. All this would need to be carefully measured, mathed and then coded. It would definitely be cool though.

The good sides of it would be that it adds a ton more realism to the game, and without a say open up potencial for a lot of new issues to write and add. The downside is the task itself, and once set up it would probably still need some final adjustments.

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[violet]
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Postby [violet] » Fri Nov 24, 2017 1:38 pm

I need to speak to a good economist!

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Bears Armed
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Postby Bears Armed » Sat Nov 25, 2017 7:04 am

[violet] wrote:I need to speak to a good economist!

"You walk into a bar and see a good economist, a bad economist, and Santa Claus: Which one do you speak to?"
(Answer: the bad economist, because the other two are figments of your imagination)
(Adapted from an old joke about banjo-players...)

More seriously, considering the extent to which governments (at least outside the 'third world') in recent decades have listened to economists of various stripes, and some of the results, I doubt whether identifying a "good" economist is very easy...
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Azurius
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Postby Azurius » Sat Nov 25, 2017 10:13 pm

Well this will be one hell of a task. Nonetheless I´m looking forward to it!

I guess this will probably take a looong time though... Giving me enough time to experiment with my tax rate more extensively in the current system. As of such I will probably be trying to get taxes down again at least timewise.

I also looked it up, it´s not "consumer tax" but apparently in english it´s called "added value tax", "sales tax" or "betterment tax". Anyhow added value tax is also a common form of taxation for many nations that should be taken into account.

Indeed a good economist... Or possibly better a bunch of em. Btw. I guess it would be good to make an official thread on the whole taxation issue at some point.

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Alterrum
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Postby Alterrum » Wed Jul 25, 2018 6:01 pm

Has there been any progress regarding this behind the scenes? It's hard to imagine a wealthy and efficient free-market economy where the government takes away all of its peoples' income but can't compel them to work, yet that's where my nation is at. What incentives are there to work, and more importantly to do it so productively?


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