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

Profit vs Taxes (Kebir Blue)

Topics: Help: Profit vs Taxes (Kebir Blue)

Travis Goeringer (Kebir Blue)

Saturday, November 1, 2008 - 05:23 pm Click here to edit this post
I know there's a lot of different opinions on this topic, but what is better for your corporations (and in turn, your country's economy), low taxes and high profit transfer, or higher taxes and lower profit transfer?

E O (Golden Rainbow)

Saturday, November 1, 2008 - 06:01 pm Click here to edit this post
The difference is that taxes apply to all corporations in your country including CEO run corporations. CEO run corporations are a huge boost to your economy because they give about 40% of their sales to you as payment regardless of taxes. However, if you tax them as well, they are less likely to want to be in your country. As a whole, I think it makes much more sense to have high profit transfer and low taxes.

Travis Goeringer (Kebir Blue)

Saturday, November 1, 2008 - 09:47 pm Click here to edit this post
the problem I have with ceo run corporations is that they keep their salaries so low, that they waste your labor when you can put them into a state corporation, get more income tax from the citizens, and get a higher production value out of them. It's been my experience that because of that, they actually end up breaking even.

I am pro-private corporations, I just have to keep a high enough tax rate to compensate for the miser-ness (not sure that's a word, but you understand) of the ceo's.

I know they want to make a profit, but so do I. If I could get all my private corps to raise salaries, I would love to cut taxes down to next to nothing like 0-5%. The problem is that they all seem to either ignore you or say f--- you when you mention that to them.

Travis Goeringer (Kebir Blue)

Saturday, November 1, 2008 - 09:47 pm Click here to edit this post
But I do thank you for your input

E O (Golden Rainbow)

Saturday, November 1, 2008 - 10:56 pm Click here to edit this post
? which CEOs do you have in your country? Most CEOs use salaries around 600, what do you have in your country?

Angus88 (Little Upsilon)

Sunday, November 2, 2008 - 05:59 am Click here to edit this post
Even with low salaries CEO corps will usually make the country more revenue then state corps. State corps must make a profit to generate decent revenue for the country, CEO corps on the other hand don't even need to make a profit to produce revenue for the country. Private and truly public corps have a higher efficiency potential then state corps, meaning you can have more private corps then state corps per population (providing you have a well developed education system), combined with the ability to potentially regain 80% of these workers through back to work schools and special clinics. Still think using 15% of workers (you would use in a state corp) for more profit a waste of workers?

Note you need a highly developed country to achieve this, if your planning to emulate North Korea then maybe in that situation state corps may be the way to go.

Travis Goeringer (Kebir Blue)

Sunday, November 2, 2008 - 09:30 pm Click here to edit this post
my education level is at 150. Most of the ceos in my country run between 200 to 400, while my state corps are at 1000. I think about 95% of my corps are profitable, so that's not a huge issue. It's the idea that a lower tax would allow for more profit for my state corps, which will increase their value, thus increasing my finance index.

E O (Little Upsilon)

Sunday, November 2, 2008 - 09:48 pm Click here to edit this post
Tax and profit transfer take money from the same place, so for state corps, it doesn't matter which you use.

FarmerBob (Little Upsilon)

Monday, November 3, 2008 - 06:12 am Click here to edit this post
High salaries in state run corps are a zero sum game. What you pay in salaries you lose in profit. CEO investment yields more revenue for your country almost without exception.

If you are seeking to wring every dollar from the system, your own CEOs should own all your corps with extravagant salaries and high taxes. In essence, your CEO is subsidizing your economy. Use of Public corps under your own ownership between entities you control can maximize this process. But again, you are merely maximizing income within a country by minimizing CEO profit or actually running at a loss for the host country's benefit.

No CEO will wish to participate in such an arrangement, however, which is why you must create such a structure with your own assets.

Angus88 (Little Upsilon)

Thursday, November 6, 2008 - 10:37 am Click here to edit this post
What you pay in salaries you get a bit back through taxes, while gaining production benefits. In other words its much more economically viable to achieve very high salaries in country run corporations because production increases are subsidized by benefits in income tax. I tested this and enterprise run corporations will earn more revenue to the country per worker, not even factoring workers potentially returnable into the workforce via back to work schools/special clinics. Certain situations country run corporations can be much more profitable (the corporations becomes non-profit increasing salaries until they break even, the country must bail out the corporation if it gets low on cash) but you cant support as many in your country.

If your planing to take advantage of back to work schools/special clinics there's no comparison, CEO run countries make more revenue to the country per worker. So be nice to them, those pig dog capitalist scum are actually benefiting your country more then your glorious pinnacles of socialist productivity, not so much global trade but your country yes. If you want them to raise their wages there is one thing you can do... set government salaries to double of what you want the private sector salaries to be, but this will cost your more in increased government expense then the gains.

Travis Goeringer (White Giant)

Thursday, November 6, 2008 - 04:15 pm Click here to edit this post
This started out being a thread based on state corps, not ceo corps. I already understood the benefits that a private corp brings in. I was just trying to figure out if I raise profit transfer and lower taxes, if they would cancel each other out while raising the value of my corps to help with my financial index.

coolwind (Golden Rainbow)

Thursday, November 6, 2008 - 07:57 pm Click here to edit this post
the value of the corp is based on the net profit after tax. So if there is no tax there is more net profit. if you want income from the corp then set the tax to 0% and then decide on your % profit transfer.

you earn a 100 quid.....30% tax is 30
left with 70 quid......50% profit transfer is 35

same as 65% profit transfer with tax at 0%

Travis Goeringer (Kebir Blue)

Friday, November 7, 2008 - 10:57 pm Click here to edit this post
thank you coolwind, finally the answer I was interested in.

Add a Message