Currently there are 2 things which actively decrease tax evasion: Public Tax Returns, and Unexplained Wealth Orders. Yes, there’s the 3rd option of the DT approach of “wealthy people wouldn’t evade tax if you didn’t tax them!”, but I’m trying to get Japan to a balanced budget, and I’m role playing a national leader, not a reality TV star.
Anyways, 2 tools isn’t very much player agency so, as usual, I have some suggestions:
-Add a link between the anti-corruption agency and tax evasion.
-Make corruption harder to reduce to zero (that one kind of deserves it own post), and make low corruption reduce tax evasion.
-Make some law and order policies which address white collar crime (again, kind of deserves it’s own post).
-Add a link between diverted profits tax and tax evasion.
-Make a couple dilemmas which deal with the tax evasion crisis. As an example: one where it’s been an open secret for some time that the tax paid by a large multi-national company operating in the country doesn’t reflect the revenues they generate, and attention is now focused on it. Given the nature of multi-national companies they could simply pick of and leave, so enforcement wouldn’t bring in much revenue and would drive out a lot of investment. Does the player: 1. down play and turn a blind eye. No material change as this is a continuation of the status quo, but annoys socialists. 2. crack down. Slight down tick on the tax evasion crisis, significant down tick on foreign investment, uptick on uncompetitive economy and corporate exodus + some opinion changes. Basically, doing the morally right thing carries enough penalties to model why real leaders don’t do this. This event should only activate if the player has a tax evasion crisis.
I’m not sure this game really needs to allow higher tax revenue. IIRC you can already collect 70% income tax and it’s already kinda unreasonably high. But I understand tax evasion could be unexpected or rather punishing in early stages. So here’s my idea - let’s add a dilemma written below.
Extensive Tax Audit Proposal
Tax inspectors are reporting that they’ve found evidences suggesting tax frauds are at rise and could become potential problems in near future. On that basis, they are urging you to approve an extensive tax audit proposal on a large number of corporations and rich individuals. However, some economic officials are opposing the plan saying that ‘it would put substantial burdens on corporations to prepare unexpected tax audits’ and thus will hurt the economy.
(something about how bad it would be if tax evasion becomes prevalent)
Reject the Plan
(someone explaining how consuming it is for entrepreneurs to deal with tax audits)
This dilemma will be triggered if the Tax Evasion situation is about to happen but yet to be actually triggered. Approving it will temporarily decrease tax evasion threat but will cost approval of capitalist, self-employed, wealthy, and a bit of GDP (or business confidence). Rejecting it won’t have any meaningful effect.
In short, let’s add a small band-aid solution so that players can at least buy some time for reaction.
To be clear, I’m not saying that players should be able to massively increase taxes without penalty, nor crack down on tax evasion without consequence. I’m saying that there should be more game play options, however everything should always come at a price.
Speaking of that price, most tax policies don’t cause as much GDP harm as they should. They are on non-linear scales, which makes sense, however this means that I can implement pretty much every tax with little to no GDP impact so long as I don’t raise any one tax above about 50% of it’s scale.
That’s because this game has primarily separated negative impacts of taxation. Black Market for Sales Tax, Petrol Protest for Petrol Tax, Brain Drain for Income Tax, Corporate Exodus for Corporation Tax. Maybe more tax situations can be added here to punish way too many taxes in a similar way that Bureaucracy does. It would be convincing if too many tax items could cause problems such as increased chances of Tax Evasion / Bureaucracy, approval drops, or typical protest effects.
Logically, there really ought to be more ways to stop Tax Evasion, but with respect to game mechanics it’s been very carefully balanced to the place that it is. Even if there were more tools available, I don’t think you should be allowed to tax any harder than you can in the current build. Japan is just very hard.
Balancing a 65% income tax with all the wealth taxes maxed the fuck out is fine by me.
I don’t really agree with this, it’s generally annoying when games hard lock me out of things. It’s more fun when I have enough rope to hang myself. My personal opinion is that it would be more fun if I had more options, but with hazards abound.
Well that would look like putting in all these new inputs (highly implemented Police, Intelligence Services, Financial Services Regulation etc) going in, then everything being nerfed back to the place it is now.
There’s already a massive amount of leeway to tax without triggering evasion. It’d be nice to invest in long-term culture engineering methods of curbing it in the longrun, but to give any more rope would be to simply make the game easier, which is not the direction the devs have discussed.
If the game wants more tools to decrease tax evasion, it should add these effects onto “Intelligence Services” and “Wire Tapping”, and inversely to “Right to Privacy”, which currently does not conflict with “Wire Tapping”.
There’s also the question of funding the IRS.
In FY 2020, the IRS employed 75,000 people, for $12.3 billion dollars.
Most taxes do not have a “cost” associated with them to reflect the administrative cost of levying the tax. To the extent that they shouldn’t, there should be a permanent “Tax Bureau” policy, similar to “Military Spending”.