Enterprise tax

Enterprise tax is there a description of what this exactly is? (for Enterprises)

Lot of the discussion of it, and history, can be found here:

https://www.simcountry.com/discus/messages/8/21485.html?1657311239

In an update earlier this year, it was removed for enterprises that have 750 corps, or less. In short, the money doesn't actually go anywhere. It made little sense it it's original incarnation, which was the reason I started lobbying to remove it.

Now, it is sort of a penalty for exceeded the enterprise soft cap on corporations. You already couldn't build new corps at 750, but you could exceed the cap by other means, such as purchasing shares. I have less problem with the tax in its current form. You have a choice of staying under the soft cap, and ducking the penalty, or you have to commit to making it "worth it" to exceeding the cap.

In fact, the current incarnation of the tax is almost the reverse of the original incentive structure. It used to be the more profitable/better managed your corporations were, the more you would be punished by the tax. Now, the incentive is to run 750 or less corps better, than simply go for more and more corps over the cap.

OK so it's a tax based on the number of corporations over 750 you have.

ANDY how exactly is it calculated?

"OK so it's a tax based on the number of corporations over 750 you have."

This I did not say. I did say the update created a system where "under 751=no tax" and "over 750=tax". The update also said it lowered the previous tax amount. That's about all we know except what we see in practice.

In practice, I look at your enterprise and similar enterprises over 750 corps and I make a few conclusions. The most important one is that the penalty is such that the incentive to stay under 751 corps is large. You can't just look at the tax and figure it against the "profits" of the corps you have in excess to the cap. These profits do not take into a significant expense that I call "depreciation" which exists in the game, and I explain here:

https://www.simcountry.com/discus/messages/8/29409.html?1662981945

The other observation I make is that the current enterprise tax is structured similar to the old one, in that the more profitable the corporations are, the more tax. I see enterprises with more corps than you that pay less enterprise tax. So, it is difficult, if not impossible, to manage your way to profitability to make up for the tax.

Long story short. Unless, you have some game goal beyond basic income/profitability it is unlikely you will achieve the most success exceeding 750 corps and exposing yourself to the tax.

Possibly, but we just can't know without Andy giving us the information on how the tax is calculated.

There may be a way but how would we know without all the information?

"There may be a way but how would we know without all the information?"

Number of your corps= 860
Amount of enterprise tax= $107B

Here's the calculation. Take your 110 LEAST profitable corps. Does their profit (after taxes) exceed $107B + Depreciation? I doubt it. Also, if you run public corps, if you don't have 100% ownership, you may not own all the profits but you DO own all the enterprise tax.

You are to wrapped up in a narrative to see my point.

I want to know how the tax is calculated.

I know what I and several others pay and it's NOT simply you are 100 corporations over the 750 limit and your pay X amount.

I hope ANDY will let us in on the what the formula is, then I can assess how to proceed.

That first sentence of my last post could be taken as confrontational, not my intent.

Aries I know you know a lot about the game and I message you quite frequently (at least is seems that way to me) the last time was yesterday.

I appreciate your willingness to share your game knowledge.

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I don't look at this game as a competition or a race. If I did I would never have started playing. There are players that have been playing for years and some that have started re-playing that know the game very well. I would never 'catch' them doing the same things as them. They have been doing it longer and are better at it than I am/would be.

Just trying different things, some will work, some will not.

"I know what I and several others pay and it's NOT simply you are 100 corporations over the 750 limit and your pay X amount."

No, it's not, but it is those number of corporations that can be cleaved to remove the tax. It's looking at one choice or another and weighing the greater benefit. Of course, the tax isn't calculated on those number of corps but all data I have seen is that you can't outrace it. More profit from better managed or more corps seem to increase the tax faster than any gains you can realize.

"That first sentence of my last post could be taken as confrontational, not my intent."

It's all good. It would be nice to know the exact calculation, but I have seen the tax in practice before and now. When it effected any number of corporations you could run, I was frustrated that my better managed/more profitable corps were simply triggering more tax. If you review the link I posted, you'll see I posted different numbers at the time. Such as:

My Enterprise
Total Corps: 512
Enterprise Tax: $61.66B ($120.4M/corp)

Enterprise A
Total Corps: 701
Enterprise Tax: $39.17B ($55.9M/corp)

Enterprise B
Total Corps: 578
Enterprise Tax: $28.99B ($50.2M/corp)

Enterprise C
Total Corps: 1570
Enterprise Tax: $149.76B ($95.4M/corp)

I would be hit with over double the tax burden, per corp, and sometimes a larger tax in real terms than enterprises with many more corps, because mine were more profitable. The calculation now, should it be triggered, seems very similar. My relief with the change this year is that at least my skill with running corps can be reflected, and rewarded, by staying under 751 corps. I have reviewed different enterprises, including yours, that trigger this tax, and I have found none that are realizing a real income benefit by exceeding 750 corps.

Or you can look at
Enterprise D
Total Corps: 1093
Enterprise Tax: 71.8 (65.7M/Corp this month)

I think 96M-66M/corp tax would be carriable? This is spread through the most and least profitable corps on average for the year.

What is in your 'Depreciation' portion of your calculation? Just the quality and efficiency upgrades? or is there something else?

FYI: Not trying to change your mind just pick your brain

Lol my Enterprise tax dropped to 105B this month. Almost 1/2 last month.

"Or you can look at"

You do realize your data is from now and mine is from 2013? Also, your data makes my point. The enterprise you reference is less profitable per corp, so his enterprise tax is somewhat less.

"Lol my Enterprise tax dropped to 105B this month. Almost 1/2 last month"

No, your tax was $107B just the other game month. If this expense jumps in one month, you probably moved or purchased a corp, which also uses that same finance line. At the number of corps you have with the approx. profitability you are currently getting, you are seeing a fairly consistent tax of somewhere between $100-115B.

"What is in your 'Depreciation' portion of your calculation? Just the quality and efficiency upgrades? or is there something else?"

After "profits" there are several expenses that corporations still pay. These are country taxes, loan interest, and upgrades. For this reason, If you see some $900B at the bottom of your enterprise financial sheet as "profit", that is not the amount of cash your corporations actually net, and will never end up being a comparable amount shared with your enterprise through profit sharing.

For public corps, some amount of their reported profit you don't even own. ie. If you control a corp with 25% ownership, that corp may report $1B monthly profit to your enterprise stat sheet, but you only own $250M of that "profit".

In the case of upgrades, you could consider their purchase an investment, building the value of the corp. However, over time, upgrades decay. This is why you still see mature corps purchase upgrades and have pending upgrade purchases. This depreciation is a corporation expense that exists and is difficult to see.


To disprove my point, you would need to find an enterprise that performs better as a result of having more corps. The one you posted is in line what I am telling you. There is no way out. If you run your enterprise less profitable, your tax will go down, sure, but it still will exist, and you don't do yourself favors to outperform the enterprise under the cap. If you achieve better profits, the greedy enterprise tax will have its hand out for more spoils.

Here is how I would ballpark top WG enterprises for the most recent game month. I an estimating an average of 30% tax and some amount for depreciation.

Enterprise A
Corps: 744
"Profit": 1,363.51B
Enterprise Tax: 0
Net Profit: around $820B

Enterprise B
Corps: 1093
"Profit": 948.62B SC$
Enterprise Tax: 75.9B
Net Profit: around $490B

Enterprise C
Corps: 858
"Profit": 883.27B SC
Enterprise Tax: 103.80B
Net Profit: around $425B

All this data backs what I have been telling you. If you exceed 750 corps, you will get hit over the head with more tax if you are more profitable per corp. On the other hand, if you are less profitable per corp, you will have less tax, but, again, you won't be outperforming anyone.

Edit: Remember again, for these stats, if you have public corps, you don't own all the "net profit".

Well I do understand getting taxed more the more you make, I am in Canada after all

Just want the information from ANDY.

ANDY?

...

Enterprise tax:

Tax is only paid if the enterprise is profitable.

- No tax is paid if the number of corporations is smaller than 750.
- First level tax is paid if the enterprise has more than 750 and up to 1200 corporations.
- Second level tax is paid if the enterprise has more than 1200 corporations.

Tax levels are small percentages of the total profit. You can check the exact percentage if you have such an enterprise.

We had many discussions with players about the tax. Players found it to be wrong as there was no real reason for this.
We tend to disagree but have made changes and eliminated most of it for nearly all enterprises.

it is now used to discourage very large enterprises. The large number of corporations in an enterprise has created a small number of very very rich players and it is hard to achieve by others, mainly by newer players.

we may introduce a third layer for enterprises with even much larger number of corporations.

If anyone encounters an enterprise paying tax while there are fewer than 750 corporations, please give us the details and we will check.

Having looked around the state of the game, I can see reason to add that "third layer". Particularly, because there is a work-around that allows a single enterprise to keep collecting a very large number of natural resource corps.

Andy, thank you for the clarification.

So it sounds as though the tax (if over 750 corporations) is straight on the over all profit of the enterprise? Is this correct?

I agree with Aries. While I do enjoy dominating the market for oil and gas on WG, it is probably unfair to newer players that I wield so much power over the resources. There should probably be a tax if an enterprise has more than 300 or so mining corporations.

No, that's probably fine. I am more looking at an example of 5000+.

Being a newer player I do recognize that there should be a benefit to the longer term players. If that benefit is having a large number of profitable corporations. I say so be it.

I agree.
we do need a third layer.

discouraging large numbers of corporations depends on the tax levels.

Geting closer.
I will implement another level in the coming week or two.

Getting closer.
I will implement another level in the coming week or two.