*UPDATED* Congress Proposal (No More Dumping): 99% Import Tax on WRM
Plugson
Hello all,
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UPDATE NOTICE: It has been suggested by several members that we add a failsafe on this measure in case of unforseen outcomes and changes in prices or supply. The suggest included a price-cap before we vote to revert the 99% import tax rate on WRM back to its original 5%.
This cannot actually be coded into a proposal in-game so it will just have to be a general agreement that taxes will be reviewed if this case occurs:
Change back the 99% WRM import tax to 5% should the cost of WRM rise above 0.36 CAD.
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First off, thank you for those that voted for me in yesterday's election and also EPIC for offering CPF a spot to run. CPF did fairly well, geting in half the Congress candidates, while another missed by only 1 vote in the final minutes of the election. Thanks all. On to other business now.
In lieu of making a proposal in the forums (which I won’t be accessing), I would still like to continue with the long upheld and valiantly obeyed tradition of 24-hour debate on any Congress proposals. I’m hoping that if the proposal is made in the next day or two (depending on the continued need for debate), it is voted on based on the merits (or lack thereof) of the idea to raise import taxes on WRM from 5% to 99%, rather than on a lack of procedure.
While this article can serve as a transparent platform of debate to the public, I’ll also be sending a group PM to all Congressmen and the CP to facilitate other discussion to be made public later in the article. If a proposal is deemed to be ‘security sensitive’ then I’ll just have to treat it like Closed Door Congress and keep it in a private group PM.
As a preamble to my main point, please consider the concept of "Dumping" as explained in this Wiki entry:
"In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market competition."
My note: (the main difference here is that in RL there is no Platobot to snap up all the excess that is dumped in our markets to flood the economy with more dollars)
Foreign Dumpers: "How's dem apples, eCanada?"
Why should we adjust to 99% WRM import tax?
Because all the other countries have raised their rates?
~~Check out my article that recorded the tax rates of other countries:
“The 1%...er 5%: eCan Taxes and a Chat with an Oil Tycoon"
~~“Because everyone else is doing it” doesn’t seem a good enough reason, so I’m assuming they are not simply following everyone else’s lead. Perhaps they are onto something, mainly
1) Protect the value of their currency.
2) Enable their own citizens to sell their WRM at a higher value to the platobot.
3) Generate some extra tax off those who do bother to sell even with 99% tax
In a reply to my previous article, Addy Lawrence explaine😛
“The economic powerhouses have optimum production bonuses which translate into the lowest cost structure which translate to low prices on the domestic market.
Canada does not have optimum production bonuses so higher import taxes mean higher costs to the consumer. Higher domestic costs to the consumer mean that people shop in foreign markets for what they can't produce for themselves.”
I respectfully disagree that we will face higher costs. FRM is at 99% yet it is not skyrocketing in price. In fact, it is usually slightly cheaper than WRM. We don’t get foreign citizens dumping their FRM into our country, yet we still have low prices. Makes you think, huh.
1 Protect the value of our currency.
-People who dump their WRM into eCanada then sell their CAD from the platobot for Gold. This devalues our currency and makes it harder to purchase company upgrades, strength training, and health packs (for those that use them).
-Platobot is buying the excess and dumping plenty of CAD into the pockets of other citizens. Why don’t we place eCanadians FIRST in line to capture this windfall?
-When I took a look at the WRM this morning, this is what I saw:
click for screenshot
Bojerianov – USA citizen, 27k WRM
PlamenBG – USA citizen 17k WRM
Klemensa – Bulgarian citizen 6k WRM
Ivan Shishmanov – USA citizen 47k WRM
Apachi50 – USA citizen 16k CAD
So in the top offers, I saw 113k WRM from foreigners. Look right to you?
2) Enable our own citizens to sell their WRM at a higher value to the platobot.
Face it, we’re all producers now and rely on the platobot for extra income. If prices do go up on WRM, more eCanadians will invest in WRM to make up the shortfall. It will self-adjust and we will profit, not others.
Let’s keep our share of the pie reserved for people on our team. And if there isn’t enough pie, we can very easily make more. That’s the nature of this game now. Let’s leave old-style taxation behind.
3) Generate some extra tax off those who do bother to sell even with 99% tax
The Ivan’s and Bojerianov’s will likely find riper territory to dump excess WRM, but those that do stick with it will be giving our Government more money in the coffers. Instead of them flipping CAD for Gold and causing inflation, we can send the excess CAD to our MUs to circulate the cash or support Gold purchases by our citizens.
It’s been too long that other nations have leeched off our lax tax policy. Let’s strengthen the CAD, put our players first, and invest in our own WRM production/profit.
Please debate below the merits and problems with this concept of mine. I’ll be following along until the debate has passed 24 hours and is done before making my in-game tax proposal.
I make this proposal according the CPF's 7 Tenets, namely:
7. To encourage growth and stability to the eCanadian economy, by making forever available credit and bursaries to the general public.
(mainly the first half of that, but I like the idea of WRM bursaries to get things kick started)
Comments
I agree Plugson. Higher import taxes and then work on our immigration strategies to help offest any issues with low production numbers. It's about time we start making eCanada a place where people want to be.
Last time when we have debated this in Congress I have agreed with 99%, but some have said that is too high.
Too high because we don't want to tax foreigners that much?
I supose it is becuase it could shock the economy.
If so, then a graduated approach might be okay. 50% now and then see what happens, then bump it to 99% a few weeks later once players compensate. I think we will have enough WRM supply of our own. Have you seen how many WRM companies some people have?
YEAH!
Yes, please!
Connor, the only issue with your plan is when someone gets new citizenship, they aren't granted a market license to their new country, so they would first be required to pay 20 to Plato in order to able to sell on the Canadian markets.
Now as for the proposal to raise Import Taxes, I was in fact the one that proposed lowering WRM to 1% last summer. Since then Congress has played around with Import Taxes on all goods (without actually taking the time to know what they were doing.) However, WRM have remained at a low level for a very long time. The reasoning being that eCanadians are generally not able to produce enough WRM to support the demand. Now this hasn't been tested in a long while.
So, I would be in favour of raising the WRM Import Tax. Though, I do fear that it will result in a WRM shortage.
Wally, the FRM is at 99% tax. Why is there no shortage there?
Can we not emulate that success?
I agree with you, Plugson. And btw, a lot of people got free licenses with the orgs disolved.
Wally...that really isn't an issue is it? We could offer a program to cover license fees. Again, we're talking about a hypothetical WRM shortage at this time.
The other side of the coin is that profits rise for WRM producers allowing them to build more capacity themselves.
I can't see a supply shortage as being an insurmountable issue.
I think we must encourage ecanadians to build WRM's companies instead encourage the import.
@Plugson, could the FRM market be emulated...don't know. But I do know that there is a larger demand for WRM and a lot of people have been investing in FRM for the sole purpose of selling to Platobot as our FRM bonuses are more stable. So is it possible? Maybe.
@Connor, no offense, but cover license fees is possibly the worst idea I've heard in a long time. If word got out that eCanada was giving out 20 Gold, we would be flooded by requests from 'unscrupulous' citizens. As for increasing profits for WRM producers thereby allowing them to make more WRM, the problem with that is that it is a very long term solution. While we are waiting for WRM production to be increased we will be suffering from increased Weapon prices as well as decreased MU supply (as most of the MUs use WRM off the market to cover slave pit production).
As I said, I'm all for it. But I am leaning to the probability that we will be changing it back at some later time.
Update: I have sent friend requests out to all Congressmen so that I can open a group PM. If someone else has everyone (including KronosQ) already friended, then please feel free to open a PM on this topic with a link to this article (should you wish).
I'm not sure it is necessary, yet a good thing to try out nonetheless.
Thanks for the feedback so far everyone.
Hmm. It would be nice to see what happens. Just remember that Plato doesn't give players WRM and a weapons company when they start out like the game does for FRM and food.
ah, good point Funky. But I hope the new players use that FRM with their food company to produce food fights or food to sell. That would be a better use of that first set of companies, yet it still might account for a % of extra FRM, though I wonder how much a new player can really produce compared to what established players put out. noted
Wally...I do hear what you're saying, but you're taking every comment as a one off. I wasn't talking of handing out market licenses on a whim. It would have to be part of an immigration strategy. I will take criticism of that being naive based on how congressional members seem to like selling their CS approvals.
Any type of program will be open to abuse by those looking to do so. To think that there is more likelyhood of foreign abuse then there is within eCanada is what I would call naive.
I forgot to add that I would favour domestic investment over bringing foreign players in, but both would probably need to happen.
@Wally
Currently I am not selling all my WRM in Canada because I would saturate the market. I have been dumping a good percentage to Russia and France, Even with 99% tax, I will probably still have to dump to other markets, but a smaller percent,
I am completely in agreement with a 99% import tax and it was/is going to be a plank in my Economic Action Plan.
Ever seen the bumper sitcker, "Out Of A Job Yet?, Keep Buying Foreign!". I contend that we need to lock down our markets and grow from within. Until then, eCanadians also need to exercise due diligence and try to buy from Canadian sellers only, even if you do have to pay a little more.
It's what I do, and others should too until this issue is resolved
Myself and Leroy participated in this with much success but I think ppl are getting the wrong idea. When we dumped WRM on the canadian market it didn't help keep prices down nor effect supply. The real goal was to dump to the bot in Canada at the highest possible price the bot would buy at make a nice profit then convert the money to gold at a 66% profit over US prices. Import taxes will not effect market prices or demand from that strategy. What it will effect is the price of gold which of course gets pushed up when ppl like us cash out. =')
Aeriala, I'm glad you explained how there was an active program to dump in eCanada.
The RM economy has no rational mechanics with the platobot running. Might as well keep it to ourselves and let eCan citizens come out ahead.
I'm disappointed that those who recently left eCanada and said they had the best interests of the nation never worked hard enough to figure out eCanada had become the dumping grounds for such countries as eUSA. Now that you're back with a perspective from the other side of things, Aeriala, perhaps you can help correct this neglected aspect of the eCanadian economy/CAD inflation.
I'm all for a 99% import tax!
I would be happy to if the electorate wills it.
I was talking about this on IRC a while ago and totally agree.
"Ever seen the bumper sitcker, "Out Of A Job Yet?, Keep Buying Foreign!"" For the record those bumper stickers are stupid and neglect basic economic principles BUT plato bot/ erep economy are also stupid and dont have basic principles.
In eWorld This makes sense
I agree with Plugson
In fact he stole most of this argument from me that I've made in other article comments
As I am a congressman, and must represent the public of eCanada with most issues, here is a comment against the tax change: (No name has been added to keep privacy)
I think it's a horrible idea. When Platobot is back on after the gold sale the WRM market will be empty again like it has been twice in the past week. - anonymous
When platobot struck those times i sold WRM on the canadian market for 48cents, it doesn't help anyone to not change it, it's all about the money. 5% import tax meant nothing. Don't confuse profiteering into the equation, the bot is a bot and when it malfunctions advantage is taken.
You do realize the amount of profit made on the import tax? 5% import tax keeps the VAT low and taxes those who want to dump. Raise the import and your potential income from import goes out the window.
Tax the foreigners because you get no taxes from canadian RM sellers. It's a simple concept, grasp it.
Another comment: (kept anonymous as well)
I think it's a well intentioned but misguided idea. Like CFovetS said, Platobot will clear the market of all offers below 0.33 CAD (when he gets back) including those from foreigners. Since part of what they sell goes to our Treasury and Canadians still get the most profit possible when they sell to Platobot, there's no reason to block them from selling here.... well, unless you're worried about the devaluation of the CAD, which I'm not.
That one was me. I'll try to get around to reading this tomorrow, Plugson. I will say now, though, that I'm a weirdo who likes a low valued currency. Remember all those Bulgarians coming here? It's because their hardworker medal gold went a lot further here in getting them those nice Q4 RM companies to make more stuff that the Admins would then buy to pump more fake money into the economy, repeating the cycle.
Yes, a lower valued CAD makes it more expensive to buy gold for upgrading (uselessly, most of the time) food and weapons companies and training at more than 0.19 gold a day. But it does make it a lot easier for new players to get more companies and making more money to buy more food and more, and better, quality weapons.
tl;dr: a weak CAD sucks for old farts raking in the CAD who would prefer raking in the gold; it's great for young players looking to cash their medal reward gold in for CAD for companies to make more CAD so that they can join the crowd of old farts complaining about the value of the CAD all that much sooner.
Crux of the argument
Low Import Taxes = More foreign RAW = More Platobot Fake CAD = More CAD in System = Low CAD Value
If you like 1 Gold = 1500 CAD then you are for Low Import Taxes
If you like 1 Gold = 750 CAD then you are for High Import Taxes
The argument is simple - Pick what side your on and voice your opinion
In the past 12 hours I have not seen a weighted argument to not raise the WRM import tax. Anyone that reads the article and comments will see clearly that a 99% WRM import tax is for the better. I am for a tax increase.
I'm all for the 99%! This will help us eCanadians be able to move our goods.. I've been stuck with WRM now for 2 days unable to sell it. But aside from the personal benefit - This would be an asset to our economy too since we are currently dishing out more money than we are taking in.
I'm still a bit unsure. Part of me feels we should be keeping the money fully in Canadian hands, but Chochi also makes a good point about the way things are now helping newer players. It really depends on who we want to help more.
Motions have been made on this on the eCanada forums to vote on this issue. Not sure weather it will be put to immediate ig-vote or go through forums vote first.
From the forum discussion:
Personally, I'm fine with giving this a trial run. However, in case this has unforeseen consequences, I think we should build a fail-safe into the passing of a vote.
i.e. if the price of WRM rises above a certain threshold, we immediately start a vote to undo the change. This will have been blessed by the speaker previously, so we spend max of 24h in an undesirable situation.
What would this value be? We wouldn't want it to be too low, as the market is bound to fluctuate some before settling. I'd propose a value of .36 CAD.
I concur with Chamrajnagar, I too would like to see this measure implemented, however we need to use prudence, perhaps a fail safe of .40 CAD would be more appropriate. We need to protect both our CAD value along with our consumers. I would however be surprised it WRM surpasses .40 CAD; as the increase in inport tax should drive the value of CAD up and drive down the cost of WRM over time.
Yeah, I'm okay with correcting the tax rate should something unforeseen happen and peg the correction with a failsafe at 0.36-0.40 CAD. It would be good to test out the response on the market and compare any changes in taxes. Looks positive to me.
Since this article was put up about 29 hours ago at 08:00 and a PM was sent out to all Congressmen and CP about it 15 hours ago, I believe I will go ahead and propose the tax change in-game, let's say, 33 hours after the first in-game proposal went up.
In other words, after 17:00 today.
Speaker has to authorize it, i mean we wouldnt want to rush things should he want to extend the debate
If this motion goes the way its going your nailing the coffin closed on the Congressional Rules of Order for what its worth.
Okay, I don't want to waste a proposal and stall any tax changes we do want to make. Obviously I made the proposal here and suggested the time of the in-game proposal knowing that it does not follow according to the Congressional Rules of Order.
But so far I haven't received a PM or comment here from anyone telling me to wait. I'm assuming people will approve of the proposal. However, I could be mistaken, so if someone knows that it will get voted down, then please inform me and I will make adjustments. Doing so by the group PM I created is a good idea there, too. I'll send out an update on it right now.
I added this suggestion to my proposal:
Change back the 99% WRM import tax to 5% should the cost of WRM rise above 0.36 CAD
33 Hours Plugson?
You risk a Presidential Veto with that little time.....
I hope someone with some storafe and some CAD buys up all the wrm so the price sky rockets, congress re-votes on the tax level and we are back to exactly where we are now
the clause to change the wrm back to 5% in the event it goes higher than .36 is a little silly
Crisfire, the clause is just a clause and can be modified in the days to come as people debate and watch the affects of the change. We can't hardwire in an automatic 5% proposal when WRM hits 0.36 so it is largely there to accomodate and encourage the debate to be re-opened with no hard feelings once a change happnes. I have seen WRM jump from 0.32 up to 0.43 and down again in less than 12 hours, so the clause is quite vague and can't be taken at literal value.
As for the veto, my lucky number 33 would have lessened the risk but after thinking it over, I decided it was better to do it after 24 hours of PMing all the Congressmen and CP (except you and hk-enFisk) to notify about the in-game proposal, which I did 23 hours and 35 minutes ago.
Its the first motion debate ive ever seen that has taken place on the forums, in the media and via PM's
So basically the speaker is irrelevant now as this motion, if most agree with the way it was handled, has thrown the Charter out the window
Which let me clear...I dont really care, except the PM part....but its one way or the other.
Ha
SAWC talking about grasping simple concepts...
Here's one: Flip flopping douchewagons tend to garner little respect... Try to take a position on something and hold to it for more that an hour and see what happens