Corporation tax, income tax, payroll tax

I have some feedback/suggestions regarding some of the taxes. I generally think that they (or at least the main ones) don’t have enough downsides. Cliff actually mentioned that in one of the dev blogs (somewhat recently).

  1. Cliff mentioned that the effect on GDP should probably be more significant and I agree with that. Implementing the laffer curve (newest dev blog) feels like a step in the right direction.

  2. Especially the corporation tax should have a significant negative impact on growth and productivity - “Corporate income taxes are the most harmful for growth as they discourage the activities of firms that are most important for growth: investment in capital and productivity improvements.”. (from a study by the OECD)
    It should also impact foreign investments for obvious reasons.

  3. Income and payroll tax should have at least a slight impact on unemployment. Cliff actually kind of explains why in the newest dev blog.

There’s generally still a lot of room for improvements but it’s awesome to see Cliff responding to the feedback (forum and YT) and upgrading the game. Having a lot of fun already.


I’m not at all saying you’re wrong here - it seems quite likely, really - but it would be neat to get a link to the study too

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At the end of page 6 you can find the quote. (that is an abstract, obviously)

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A high income tax would hurt productivity, not unemployment per se. Unless it drove wages under the unemployment benefit lol

People will still work to avoid starvation etc, they just have fewer reasons to work for higher pay. Granted, you suppress business revenue by decreasing incomes, but that’s true of all taxes.

This discussion is beyond the purview of this game. However if one was to establish a universal basic income along with universal healthcare, I would find it laughable that “productivity” as a concept would be affected either way. Certainly not lower.

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Has someone hijacked your account?

Nah, it doesn’t have to be lower than the unemployment benefits. It still discourages taking up a job because it reduces the benefit of working. (Slight effect)

With the major taxes, it seems strange to me that having one or two of them at a very high level is quite damaging to GDP, while having many taxes at lower levels is mostly harmless, even if the total taxation is much greater.

Instead, maybe those taxes should all contribute to a simulation value representing the overall tax burden, which reduces GDP at high levels (although there could still be smaller individual effects, if a specific tax is especially bad for GDP).

Also, it strikes me as an oversight that the Flat Income Tax has no effect on GDP at any level, despite being tied with the standard Income Tax for the most possible income from a single policy.


Yes I have considered the whole ‘combined tax burden thing’ but I am wary of changes that make the simulation so complex as to be un-governable :smiley:

Although… there is actually an argument that that makes some sort of sense (multiple taxes seem less damaging). Our UK top tax rate is 45%, but if you add up car tax, petrol tax, VAT, national insurance, Income tax and alcohol duty and so on, most of us probably pay a really super high rate. Having it distributed over lots of seemingly unconnected taxes probably lets the government tax us all more :smiley:

Not trying to be annoying or anything but are you planning on nerfing taxes (= making them more realistic :stuck_out_tongue:) or is that more of a “maybe, maybe not” type of thing? (It’s not on the trello list, so I’m curious)

The real oversight is that Flat Income Tax is even a thing vis-a-vis (regular) Income Tax.
A income tax progressiveness policy is definitely the way to go there. More flexibility (including negative tax by going extremely progressive and perhaps tax shelters by going extremely regressive) and it’s the same number of policies overall (if extreme regressiveness is cosidered tax shelters, it’s actually one policy less overall)

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The upcoming balancing patch (1.09) includes laffer curve stuff, which means that yes, taxes are kinda nerfed :smiley:

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