eIndian Taxation
•
by Ambrose Didymus
As part of my recent policy remarks on the eIndian forums, I touched on changes that could be introduced to make the eIndian economy more effective.
Central to my message is that the marketplace should be free of government interference. This means reducing tax and no government run companies.
The current high taxation and government-run corporations in operation set a precedent for government excess and runaway spending. I urge those in charge of these ideas to reconsider this approach.
For the benefit of context, here are my remarks:- I would like the VAT abolished (0😵
, for Income Tax to be reduced to 1% for all industries and for the Import Tax to be set to 10% for all industries.
Budget
Before considering taxation, our focus should be on obtaining an accurate accounting of how much we actually need to spend as a government every month.
Taxation
The elimination of domestic taxation puts every business owner on a level playing field, and gives every worker the opportunity to spend their hard-earned money in a way that they would like to. It makes each citizen and business owner more accountable for their actions, but also gives greater reward.
Moreover, it allows entrepreneurial citizens to save funds in order to start a business or charity enterprise and sets a strong precedent for our eRepublik as a society which embraces both personal and economic liberties.
Funding Government
"But how will government be funded without taxation?" I hear you ask.
Even without taxation, the government has the greatest money making tool at its disposal. It has the capacity to issue 1 INR for the incredibly low price of 0.005 Gold
Consider the three government run businesses which have been started recently. Even if we just consider the startup costs for these enterprises that is 60 Gold. These companies will have to run for many months or indeed years in order to begin to earn these startup costs back and start realising a true profit, if any.
However, if the government had instead used this 60 Gold to issue 12,000 INR, the government could have made a 60 gold (1 INR @ 0.01 Gold) in real profit in quick time by selling this currency on the monetary market.
Inflation
But what about inflation? I hear you ask. “Doesn't issuing INR inflate our currency?”
First of all, eRepublik inflation is a misnomer - The base currency - GOLD - is magically conjured out of thin air whenever you receive an award in the game, whenever a congressman is elected or whenever gold is purchased for real money.
With other gold-sinks in the game (like creating a company, or running for party president, or MPPs or Resistance Wars) inflation is not an issue. As long as there is demand to purchase INR at above 0.005 gold, then this works.
Secondly, these actions are already practiced by the Indian Government Bank.
Lastly, i'm not arguing to issue money recklessly. Let's see how much we need to run the government and earn enough gold through the monetary market to pay for this rather than burdening citizens with unnecessary taxes.
Facebook
Twitter
Discord
Comments
The only reason I would not want to get rid of IGB companies is because of the many jobs they hand out to indian citizens but your ideas seem like they would definitely help the economy
Perhaps one of the best solutions to avoid the government having to create welfare programs and companies, is to lower taxes but raise the minimum wage slightly in order to do two things:
Lower taxes means less tax revenue, which means less money to issue to new citizens but this gets counteracted by higher starting wages for citizens, effectively recouping the lost starting money.
Also less government assistance is needed in order for these new citizens to afford necessities like food, etc. Less government assistance means less revenue needed, which also reduces the amount of money the government needs to issue every few days, allowing for the government to get what money they do need a lot quicker because the full sum is much smaller.
Without combining lowering of taxes with raising the minimum wage though, the plan falls apart.
Good article though. Voted.
Absolutely agreed on principal. We may, however, need to consider slightly higher taxes depending on the budgetary needs. I have a strong belief in free markets.
Almost Absolutely agreed.
Voted.
What govt company can help in is to help citizen who start their carrer in India buildup enough skill and wellness so that they can cope with the presure in private enterprises. Other than that i agree with u! voted.
@ jelly - the IGB companies would be sold so the were owned by citizens of eIndia. The IGB could open a hospital company; we could do with two of them.