Increase the flexibility of the taxation system

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Increase the flexibility of the taxation system Status: Please read our response

Detailed Description:

Currently there is only one tax which can be adjusted by the president of a country, and some other taxes which the president has no control over. The taxes which the president has no control over are country resource payments by corporations (they aren't called "taxes" but functionally they are, since the corporation is forced to pay them to the government.), and also miscellaneous taxes paid by the citizens. The one tax which the president has control over is the corporate profits tax. The problem is that the corporate profit tax is only paid by corporations which earn a profit. This would be perfectly fine if every CEO of every enterprise in Simcountry diligently ensured that his corporations were profitable, but unfortunately many CEOs neglect their corporations for various reasons. For instance, some players build corporations producing military weapons because, for strategic reasons, they want control over the production of their preferred weapons. Then even if those corporations can not possibly be profitable, for instance because so many players want to build those same corporations for military reasons that there is a perpetual surplus of the product they produce, their owners frequently continue operating those corporations anyway, simply giving them financial bailouts on a regular basis to prevent them from going bankrupt. Also some CEOs simply abandon their accounts after a while, but don't bother to formally close their accounts, close their enterprises, close their corporations, or else provide for any sort of continued administration of their corporations after they stop playing. One way or another, we Presidents get stuck with unprofitable, failing enterprise-controlled corporations which pay little in taxes, but which pay excessively high wages thus usurping scarce workers, thus preventing those workers from being employed in more profitable corporations which would be able to contribute more in taxes, which take ages to go bankrupt and close down on their own, and which are sometimes kept alive indefinitely by repeated transfers of cash from the enterprises which control them if their owners want them for one reason or another despite their unprofitability. Private corporations like those can be frustrating for presidents, because they usurp many valuable resources, pay little in taxes, and take forever to go away on their own. If you get stuck with one of them in your country, there's no way to make it contribute very much to your country or to stop usurping valuable workers, and your only real options to get rid of it are either to send the CEO a polite message asking him/her to remove his/her unprofitable corporation from your country, or in the event that the CEO doesn't remove the corporation from your country, to nationalize the corporation simply in order to gain control over it so that you can shut it down. If you send the CEO a message, the CEO may not get your message for some time, and may simply ignore it anyway. Conversely, if you nationalize the corporation so that you can close it yourself, you have to pay the CEO for the corporation. Thus you are forced to pay money to remove from your country something which was costing you money anyway. What is more, free players can't nationalize corporations, and so are powerless to do anything about this other than registering a country which doesn't already have any private corporations in it, and then banning CEOs from building corporations in the country or from bidding on corporations already in the country. OK, enough griping. Here's my proposed solution: Keep the corporate profits tax as an adjustable tax just like it currently is, but eliminate country resource payments, the miscellaneous taxes paid by citizens, and any other miscellaneous taxes which I may have overlooked. At the same time, ADD one of two other taxes: If it is feasible from a programming perspective, add a national sales tax so that whenever citizens purchase products bought by their government, i.e. coffee, fruit juice, bread, butter, gasoline etcetera, they will pay whatever the price of the product happens to be, but they will also pay a separate sales tax to the government, calculated as a percentage of the price of the product. Furthermore, make this tax adjustable by the president to any percentage he/she wishes within a reasonable limit. In other words, let's say the citizens of a country buy a product which costs 1,000 SC$. If the sales tax is zero, they would pay 1,000 SC$ for the product and nothing in tax, for a total of 1,000 SC$. If the sales tax is 10%, they would pay 1,000 SC$ for the product and 100 SC$ in tax, for a total of 1,100 SC$. If the sales tax is 20%, they would pay 1,000 SC$ for the product and 200 SC$ in tax, for a total of 1,200 SC$, and so on. With a national sales tax, it won't matter to a president if an enterprise controlled corporation in his/her country is profitable or not, because even if the corporation is a financial wreck, so long as it pays good wages its workers will still have plenty of money to spend on various products and to pay sales tax on them. On the other hand, if the corporation pays lousy wages, all the president will need to do is to build a better, more profitable corporation and raise wages to draw workers away from the failing corporation, or else invite a CEO to do the same. Either way, so long as there are plenty of citizens working and they are all well paid, they'll have plenty of money to buy products purchased on the world market and to pay plenty of sales tax on them. As long as the sales tax was adjustable by the president so that the president could extract the maximum amount of revenue from it without harming the economy, this would completely undercut the problem of neglectful CEOs leaving failing corporations to rot and fester in players' countries, usurping many resources and contributing little in taxes. Alternatively, if a national sales tax is deemed too difficult to program, then instead implement a national income tax, also adjustable by the president. In other words, whenever workers in corporations earn money, a fixed percentage of the workers' salaries, the percentage being set by the president, should be paid to the government in the form of taxes, the rest being made available to the workers to spend on various goods. I would consider the national sales tax preferable to the national income tax, because the national sales tax would only tax the money spent on goods and services (milk, butter, eggs, electricity etcetera) whereas the national income tax would also tax money which might otherwise go into the citizens' investment portfolios and be used to earn more money. However, if the national income tax is easier to program than the national sales tax, then it might be a good alternative. Please vote yes or no depending on whether or not you agree that Simcountry should eliminate country resource payments and the miscellaneous taxes paid by citizens, and replace them with a national sales tax and/or national income tax adjustable by the president.

10 gamers voted for the proposal.
5 gamers voted against the proposal.

The proposal has been ACCEPTED.

W3Creative reaction:

Far too long to make a point.
It should be clear that taxes are on profits (although all private corporations pay a percentage of their turnover).
In addition, tax rules are the same for all corporations in the country. There are no exceptions.
We agree that the president should have more freedom in setting tax levels but implementing it should have other consequences.
Increasing taxes, will increase the income of countries short term but corporate owners should be able to move out of the country immediately without any compensation to the president.
Lower taxes should be published and help in getting new corporations into the country.

These are examples of consequences but any such change should look into more details and make a system change with more possible parameters.

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