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Forum General Why Is 0% Tax Rate Worth It? (Little Upsilon)

Why Is 0% Tax Rate Worth It? (Little Upsilon)

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Accordion_This (Little Upsilon)

All worlds
24 Jan 2011 07:30Link
This is my attempt to explain to "The Empire of Milentia" why 0% tax is better than 10% tax. I'm pretty sure my explanation is pretty close to the actual rules, but I'd appreciate the corrections of any vet who fully understands the economic game.

So here's how it works. If one of my corps is in your country, it pays you two different payments: Tax, and Country Resources Used. The tax I pay depends on the tax rate of your country - so if you set 10% tax rate, I pay 10% of my gross (not net!) profit to you as tax. The Country Resources Used payment depends on my profit as well (but I think it depends on my *net* profit), regardless of your tax rate. So as my gross profit increases, the tax I pay increases, and as my net profit increases, the "country resources used" I pay increases.

If your tax rate is too high, then it is harder for my corporation to make money, and I therefore pay less
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spires (White Giant)

All worlds
24 Jan 2011 11:09Link
Country Resources Used depends on sales of products not profit so even if the corp do not make any profit it still has to pay it. The percentage paid depends on the quality of the product the higher the quality the higher the percentage paid.

The reason why you want to set to 0% is to entice ceos to settle in your country first. CEOs are limited in how many corps they can build per month so they will most likely choose the one with the lowest tax rate. So you may have to wait longer if you set it to 10%.
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Navamin (White Giant)

All worlds
24 Jan 2011 15:19Link
Hmm, so now that I have as many CEO corps as I want, I could just go ahead an introduce a tax. But, I won't as my country already makes more than enough money. To me, I'd rather the private corps do well, and be run properly than to nickle and dime them.