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Bradley

Our current economic situation, tax and the way forward

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Good evening folks,

I am writing this topic in an attempt to start a conversation about tax. Specifically, I want to lay out where we are now, why we need this conversation and where we can go from here. 

 

Where are we now?

As of the time of writing, we have 22 nations who are a priority to get to C16. This will cost a significant amount of money, and I estimate this to cost circa 8.8 billion over the next 3-4 months. We are on target to take enough in tax to cover this cost, but not by a comfortable margin. Indeed, that 8.8 billion over covers those 22 nations - not those currently going through training who might graduate over the coming months, nor does it include the partial grants over city 16. 

 

In terms of current “reserves”, SK does not hold the cash to sustain a prolonged war. Nor does it have the cash to fund any kind of rebuild. We would be forced to borrow heavily after the next war. This isn’t new, and indeed we borrowed almost 3 billion after the last one. 

 

However, SK is more than twice the size (in terms of cities *and* member count) since then. Consequently, rebuilding will be twice as expensive, and the amount we need to borrow will likely be more than twice that. The higher tier of SK has enjoyed relatively low tax (both relative to SK history and the game), and the price for that is high tax after a war to pay off for said loan. 

 

The problem is, this only works if we have a solid amount of cash when going into a war. To put it bluntly, we don’t have that. While we are good for resources, cash is just as important. We are facing a long term issue unless we take action now. In an ideal world, such action would have been taken in April/May of this year, but there was no dedicated Econ, and no government department or member was actively taking measures to prepare for the unprecedented growth we are now experiencing and were experiencing then. This was a blunder, and one we are paying the price for. I want to talk more about this, as it’s relevant to the current topic.

 

Why do we need this conversation?

As I touched on in the previous section, SK more than doubled its membership size in a short time frame in April/May. Indeed, at one point we reached over 70 members. At that time, the position of Econ was left vacated and as such there was no strategy in place to sustain this growth, either in the short term or long term. This remained the case until August when I effectively handed over IA to Cakey while I attempted to build a strategy and build a department. 

 

Alas, this was too late. The rewriting of tax didn’t have the desired effect. The whole idea behind the new tax structure was to turn C10s and below into net contributors before graduation. This required a prolonged period of time at under city 10. We didn’t have that time for the reasons already stated. By the time this tax plan was implemented, the vast majority of those new members were already graduated and receiving grants. They received moderate increases in tax, but fell far short of becoming net contributors for a very long time. 

 

We also had a problem with resource levels. Taking over econ, we had 2,500 gasoline in the bank and was actually in debt with uranium. Thankfully we remedied this rather quickly. We now have a healthy rss level, but this costs a lot. There was no avoiding such a cost though, as the NAP expiring in August meant we needed to be prepared. 

 

As such, we are left with a bank that can support upcoming expenditure, but would not be able to support any kind of military action, nor be able to support any unexpected economic events. Without revealing the actual amount, I can tell you that we are not remotely close to having a figure that is worthy of a top 15 alliance - let alone a top 30. 

 

I am not blind to the fact that real drastic measures would need to be taken to reach those healthy levels. I am also not blind to the fierce opposition such measures would be met with. We are therefore resigned to the fact that we will need to borrow heavily in the future. That’s fine, but that isn’t a viable option with our current balance. Previously, we loan to rebuild, not to sustain a war. If we do nothing, we would be loaning to rebuild and to sustain a war. This would take months at high tax rates to pay off. Therefore, it is not feasible and is something no government could contemplate if there was an alternative. So, we need funds to sustain a war and to be comfortable in our economic situation. We’ll deal with the loan at a later date, which is inevitable regardless of what we do. 

 

There is no escaping the fact that we do not have an adequate balance. 

 

Where can we go from here?

There are a range of options. News flash though, they all involve further increases to net income of your cash for the short term. 

 

  • Changes to tax day (This will be done regardless of further options)

I’d like to propose that rather than 1 tax day per month, we do 2 per month.

Rather than taxing resources at 50% and cash at 75%, we’ll only tax cash 100% on both days. We would also half resource tax during those days in an attempt to reduce the impact this measure would have.

 

  • Short term, drastic hike in tax

Another suggestion is to do 10 days (roughly) at 100% cash tax. 

This would be an ideal situation, would raise roughly 5.5-6 billion, and would probably solve this issue for the short-medium term. It would ensure we can commit to our growth programmes and would give us plenty of cash to sustain a war. Hell, we may even be able to reduce the amount we loan after the next war by quite a bit (and therefore reduce the higher tax rate in the future to pay for such loan). 

I am open to other variations of this i.e. 5 days 100% tax, 5 days regular tax, 5 days 100%, or other alternatives should there be a desire for that.

Side note: resource tax would be unaffected. I would also be willing to budge on the tax days and the % of cash taxed on such days. 
 

  • Increased tax from now until the end of year

Quite simply, we could raise cash tax on everyone to 25%. Resource tax would be unaffected.

This brings in less, measure in place for longer than 10 days (as above) and we would ultimately need to take out a bigger loan after the next war. 

I would also note that, while it’s possible you’ll pay less in tax using this method, you shouldn’t rule out population growth and building cities during this time. Population increases every day (capped at 4 years), meaning more tax. Moreover, higher tax rates for a prolonged period of time would ultimately result in less cities being built for our higher city count nations. This should be factored in. 
 

  • Your suggestions

Do you have any suggestions? Anything you desperately don’t want to do, or something you think we should be doing? This topic was created to gauge feedback, so please give it. Both negative and positive. I want to know what you think, so tell me!

 

What we are not going to do

  • There may be some of you that say we should cut back on the amount or value of grants we offer. But I must say to you that an austerity-style approach to this problem is neither appropriate nor something which could be accepted in these circumstances. Gone are the days of limited grants. SK is majority sub-15, half of our alliance is ‘new’ (compared to most of you!). Their growth and development must be supported. 
  • Some of you may say to cut funding and let the smaller people raid during the next global. To you I say this: we haven’t been in a war since February and there is no guarantee we’ll be in one any time soon. Moreover, the meta of the games war system has changed drastically. There is no guarantee such an approach would work in a war like it did before. 

 

Final thoughts

I’ve always hated tax as a member, especially when you don’t receive much in return. But being in gov gives a different perspective, as does being in a community which is as awesome as SK. Seeing the amount we send out (happy to break that down further for people, just ask) and watching the results as our score, average score, average city count etc all go up is worth every penny. And being in SK always has been more about the tax or economic benefits. We are a community. We all contribute to the alliance, we all, at some point, take from the alliance. 

 

I also want to stress that these changes are only temporary and serves as a way for us to "catch up" with our economic needs. Should we take the short and drastic measures, we could realistically resume “normal” tax rates by the end of November. Should we go for a moderate, 2 month increase to 25%, then we can resume normal tax by the end of the year. We will not have these measures longer than we need to.

 

I know this has been a lengthy post. Believe me, it is not a post I wanted to make just 6 weeks after setting out tax changes. But we would be highly irresponsible to not highlight this problem and to not take action.

Edited by Bradley

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I mean I’d be all for a short term increase to 100% to shorten the pain. It’s like ripping off a bandaid IMO. You’d still be able to make cash of off selling resources. We could also do alternating weeks of high tax say like 75% one week and then 25% the next or something else like that.

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Not an econ expert by a long shot, but running 100% cash, 0% resource days might be an idea. 10 in exchange for 5.5-6bil seems like the best solution to the situation, but breaking it up more would be an easier pill to swallow. Perhaps running 100% days on weekends for 5-6 weeks until the bank's healthier?

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Short term pain long term gain, 100% for 10 days seems to be the better option and it can be repeated every few weeks until it is not needed anymore and afterwards when there is more than enough perhaps tax's could go down (maybe).

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Do the 100% makes everyone's life easier.

 

However may I suggest some ideas which might not be possible accounting for sks size. How about (especially for larger nations) an option to go into 100% taxes in return for either a tax break or support in their next city? It won't be 1:1 however if for example we need gas and we have stocked up on something else a gas producing nation could go 100% tax on resources for a while and then receive either a 0% tax break for a set amount of time or support to their next city or project? I realise we are having issues so maybe spending money while taking it in isn't the best option currently however I think the tax break could be a good option?

 

I support short bursts of high taxes either way and maybe some more support for larger nations

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10 days in a row is not a good idea.  I buy food and iron in smaller intervals than that. I'm sure I'm not the only one who leans on the market for some resources and also lacks the foresight to keep enough rss on hand to survive 10 days with no income. 10 days spread out over a month would work just fine. 2ish days in a row with like 3 in between at regular rates.

Alternatively, let's just be good at the politics part and not do the war part. 

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15 minutes ago, Ren said:

10 days in a row is not a good idea.  I buy food and iron in smaller intervals than that. I'm sure I'm not the only one who leans on the market for some resources and also lacks the foresight to keep enough rss on hand to survive 10 days with no income. 10 days spread out over a month would work just fine. 2ish days in a row with like 3 in between at regular rates.

Alternatively, let's just be good at the politics part and not do the war part. 

You wouldn’t lose all income you can still sell what you produce on the market. Even at 100% tax I’ll still be making around 3.5 million a day from resources 

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I think 10 days of 100% tax is the best course, best to stabilize the ship as soon as possible rather than unnecessarily wait. Ren brings up a good point, I also often don’t keep enough food/raws for 10 days at a time. Assuming we know when the tax period is in advance though, shouldn’t be too expensive to just stock up beforehand.

I do like that idea @Heath, problem being of course that the objective of this is to bring more money into the bank than is leaving it, so at the moment I don’t really see a way that such a system would help anyone (if you’re putting more in than receiving, why go on the 100% taxes? And if you’re putting in less than receiving, why should the bank pay for your stuff when the goal is to raise money?)

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25 minutes ago, Ren said:

10 days in a row is not a good idea.  I buy food and iron in smaller intervals than that. I'm sure I'm not the only one who leans on the market for some resources and also lacks the foresight to keep enough rss on hand to survive 10 days with no income. 10 days spread out over a month would work just fine. 2ish days in a row with like 3 in between at regular rates.

 

7 minutes ago, MC-Master095 said:

I think 10 days of 100% tax is the best course, best to stabilize the ship as soon as possible rather than unnecessarily wait. Ren brings up a good point, I also often don’t keep enough food/raws for 10 days at a time. Assuming we know when the tax period is in advance though, shouldn’t be too expensive to just stock up beforehand.

This would be advertised well in advance. I'll give this thread a couple days to let the conversation run and then make an announcement based on what's said here - I would be aiming to give between 1 to 2 weeks notice. 

Edited by Bradley

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20 minutes ago, MC-Master095 said:

I do like that idea @Heath, problem being of course that the objective of this is to bring more money into the bank than is leaving it, so at the moment I don’t really see a way that such a system would help anyone (if you’re putting more in than receiving, why go on the 100% taxes? And if you’re putting in less than receiving, why should the bank pay for your stuff when the goal is to raise money?)

It's putting in more than you get back, I know this might sound meh, but it's more in the light of giving more to the alliance than you get. It's voluntary so you decide how long, I'm sure bradley could whip up a quick time on 100% Vs how much support you get back table. It is self sacrafising however I don't know about you but I'm fine with being another 10 days on 100/100 taxes if it means itll help the alliance obviously the rewards won't be that great but either way it's a positive income for the bank. Obviously for guys bigger than me it will be more income but yea...

I know tkr had this system and there were a few larger peeps who didn't mind doing it. Of course if people don't want to there is no need but a quick poll could easily show that.

Edited by Heath

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Shocking. The socialist government ran out of money.

 

10 days of tax seems the most efficient and otherwise harmless.

Alternatively, have an opt in 100% monetary tax. For as long as said person wants. I've just been buy credits for the last however many weeks. So I really don't mind sitting on a tax bracket for the foreseeable future.

 

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Why not have a tax farm? /s (NPO cheating scandal joke)

 

In all seriousness, do the C20+ players need any financial support? They're the ones that should be making the most money to pay for themselves. Why do they pay the lowest taxes anyways? I bet most of us are busy on weekdays and free on weekends. Correct me if I'm wrong. Also, I do see Ren's point, even though I have to keep more food and uranium in order to get grants. And are there good alternative methods of fundraising that have low risk IRL or in-game? I think raising taxes overall will probably be a good idea, but it will be better if we get big players (especially if we get big players defecting to our alliance).

Edited by Anun Tidera

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12 minutes ago, Anun Tidera said:

Why not have a tax farm? /s (NPO cheating scandal joke)

 

In all seriousness, do the C20+ players need any financial support? They're the ones that should be making the most money to pay for themselves. Why do they pay the lowest taxes anyways? I bet most of us are busy on weekdays and free on weekends. Correct me if I'm wrong. Also, I do see Ren's point, even though I have to keep more food and uranium in order to get grants. And are there good alternative methods of fundraising that have low risk IRL or in-game? I think raising taxes overall will probably be a good idea, but it will be better if we get big players (especially if we get big players defecting to our alliance).

Our cities cost SIGNIFICANTLY more everytime we buy another one. I have AP and ACP and c23 costs 300 odd million when my daily income is 1.8k alumn or so and 4 million profit in cash. It takes exponentially longer to get the next city after c16 or so and not equally with your income.

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Just now, Heath said:

Our cities cost SIGNIFICANTLY more everytime we buy another one. I have AP and ACP and c23 costs 300 odd million when my daily income is 1.8k alumn or so and 4 million profit in cash. It takes exponentially longer to get the next city after c16 or so and not equally with your income.

Why not petition Sheepy to make cities and infrastructure cheaper? And with the current model, is it even worth it for people of your size to expand?

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3 minutes ago, Anun Tidera said:

Why not petition Sheepy to make cities and infrastructure cheaper? And with the current model, is it even worth it for people of your size to expand?

Petitioning Sheepy won't get us anywhere nor is it really necessary to be fair. His nation is under performing when it comes to monetary gain as it is currently. And there are a lot of reasons its worth it to expand at that size in fact it's not wise to stop growth at any tier otherwise nations will fall behind especially in a war related aspect. Nations with more cities are able to earn a lot more with nations that have less cities. In theory you could have a 10c nation that makes as much as a 20c nation however the cost of getting a 10c nation to make say 10m a day like a 20c nation could would be a lot more expensive because of the cost of infra needed to get to that point whereas with more cities you could buy more cheap infra in those cities.

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1 minute ago, Squeegee said:

Petitioning Sheepy won't get us anywhere nor is it really necessary to be fair. His nation is under performing when it comes to monetary gain as it is currently. And there are a lot of reasons its worth it to expand at that size in fact it's not wise to stop growth at any tier otherwise nations will fall behind especially in a war related aspect. Nations with more cities are able to earn a lot more with nations that have less cities. In theory you could have a 10c nation that makes as much as a 20c nation however the cost of getting a 10c nation to make say 10m a day like a 20c nation could would be a lot more expensive because of the cost of infra needed to get to that point whereas with more cities you could buy more cheap infra in those cities.

Sheepy's nation just exists so he could have a P&W account as an admin. It's not meant for him to play the game. Is the system fair in your eyes? :think:

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I'm down for a ten day tax. I think an idea would be to tax based off of how long a member is in the alliance and city size for the future. As people that been in the alliance for a long time paid a bunch of taxes already and in return get little financial aid back. While the newer nations once they reached a certain number of cities should pay a little bit more to fund newer nations. 

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1 hour ago, Anun Tidera said:

Sheepy's nation just exists so he could have a P&W account as an admin. It's not meant for him to play the game. Is the system fair in your eyes? 

Sorry when I said “his nation” I was referring to Maeve not sheepy. I assume that’s what you thought I meant given your response at least. 

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