Simcountry is a multiplayer Internet game in which you are the president, commander in chief, and industrial leader. You have to make the tough decisions about cutting or raising taxes, how to allocate the federal budget, what kind of infrastructure you want, etc..
  Enter the Game

Why You Should Use 0% Tax (Little Upsilon)

Topics: Beginners: Why You Should Use 0% Tax (Little Upsilon)

Accordion_This (Little Upsilon)

Friday, March 4, 2011 - 10:18 am Click here to edit this post
If you are planning to run a CEO-based economy, 0% tax is always more lucrative than any other tax rate. Why?

Well, a CEO is always going to invest in a 0% tax country rather than a 10 or even 5% tax country. This is because he/she stands to make more money in the 0% tax country because there is no tax burden. So 0% tax is more useful than any other tax rate in attracting CEOs to your country.

You also make more money from a factor outside tax called "Country Resources Used" than you would ever make from tax, even if your tax rate is 100%. Here's an example from a 75% tax country:
(from Profit/Expenses of Corporation for 1 month)
Country Resources Used 1,435.57M SC$ (this is paid to the country)

(from Cash Flow Data for one month)
Tax Paid (to country) -191.39M SC$

So you're actually making 10 times as much money from the former than you are from tax, even at 75% tax rate.

So let's weigh up the two options. Option A is a tax rate over 0%. Option B is a tax rate of 0%.

Using Option B, you stand to lose a great deal of CEO investment for a gain of around an extra 1/10 of Country Resources Used.

Using Option A, you stand to lose that extra 1/10 of your Country Resources Used in exchange for massive CEO investment.

Or, to put it differently: I was investing in the Kingdom of Northumbria - until he told me he was changing his tax rate to 75%. He'll now lose that investment (and the $1B a month I was paying him) in exchange for a possible gain of around $100M on any corporation that doesn't leave.

My theory: in a CEO-based economy, 0% tax is always best. Thoughts?

Matt Patton (Golden Rainbow)

Tuesday, June 14, 2011 - 08:07 pm Click here to edit this post
countries can run on 0% tax so the jack up salaries
to sky high like 450 or 600
at this level any company is guaranteed to loose 1 bil a month max quality max price still loose
plus they don't jack up the gov salaries so there is a huge disparity between the 2 so welfare sucks
so production is low
taxes don't matter when you loose income
in the end you get high salaries
low production
I leave my tax at default
even with sky high salaries country still don't make a return
I'll take CEO companies but only if they are good no junky stuff and if I have room
and can't support go crazy on HT like FMU and ammo comp weapon comp
I use my ceo to add ceo companies

Add a Message