I appreciate the effort, and the fleshing out of Particracy's economic system -- thank you for putting this together!
-- but I do have several concerns, sorry:
Deficits that are near 100% of a nation's GDP
An accumulated debt can certainly be more than 100% of GDP; but for the
yearly deficit to be anywhere near 100% would be bizarre (or alternatively indicate total economic collapse).
or above 100% of said nation's GDP
Eek -- I don't think that that's mathematically possible. Government spending would have to be the only economic activity in the country whatsoever, and/or tax revenue would have to be less than zero.
obscenely high corporate taxes (any corporate tax above 45%)
Please replace the judgemental word "obscenely" here.
I'm a socialist. I have no problem with corporate taxes being in the 80+% range; I feel that the only "obscenity" involved would be if corporate taxes were to be below about 20% or so, since they would then be obscenely low.
The stated effect of a high corporate tax rate ("drive private corporations to nations with lower corporate taxes"), I fully agree with -- because a suitably high corporate tax rate does indeed help to free that nation's economic structure from corporate domination; that's kinda the point -- my only objection here is to the wording "obscenely high". Please replace it with "very high" or the like. Or even "extremely high" for that matter. These would be more descriptive than judgemental.
obscenely high income taxes (any income tax above 70%) drive down consumption and investment.
Here, I'm afraid my objection is more fundamental: this figure is both arbitrary, and it also discriminates against nations who use progressive tax structures.
Let's take a counterexample. Which of these two nations should be considered and perceived, by their own citizens and internationally, to have higher income taxes?
A) A nation where every inhabitant pays a 69% income tax on their entire income.
B) A nation where non-billionaires pay no income tax at all, and where billionaires pay no income tax on their first billion of annual income but pay a 71% income tax on that portion of income over one billion.
According to the current wording, nation A would be considered low-tax, and nation B high-tax.
Common sense would be the other way around, I hope.
In the USA, in 1951, the income tax rate on the highest bracket was 91%. Sixty years later, in 2011, a paltry 33%. The USA economy was
far stronger in 1951 than in 2011. Unemployment in 1951 was under 4%. In 2011, it's over 9% as officially reported; the true figure is much higher.
What should we do instead?
I recommend comparing total income tax revenue to GDP instead (and both of these figures are readily available on each nation's budget page); but I'm open to other suggestions too, of course.
Perhaps let's consider a nation where the total income tax revenue is over, say, 25% of GDP to be "high tax", and one where the total income tax revenue is under 25% of GDP to be "low tax". Or 20% of GDP, if 25% is felt to be too high.
The current wording deeply penalises nations who use fair progressive income tax structures, while rewarding nations that use schemes that hit the poor and working classes with a flat tax, even a massive one. (Please see nations A and B above.)
By contrast, my suggestion would allow nations to select either income tax approach, or anything in between, without the nation being penalised just for this selection.
Finally, I completely disagree with inserting currency unit size into these matters:
Farsun wrote:According to this, if we opt-in the nations that would be considered comparable with the LOD are:
Rutania, Luthori, Telamon, Aldegar, Trigunia and Lodamun.
Thus, this would mean these nations would be considered economically powerful.
Currency unit size is irrelevant, as long as wages and prices scale accordingly.
(Gradual
increase or decrease in currency unit size would be relevant, of course; but in Particracy the exchange rates are permanently fixed in stone, so this is not a factor here. Inflation would be even more relevant, but I'm unaware of that being officially tracked in Particracy anywhere.)
As long as we exclude anything such as culture, and limit our concerns to only the currency and economy:
Why should I care whether I live in nation C, where ongoing inflation is minimal, unemployment is moderate, a typical middle-class wage is 400 of nation C's currency unit, where a typical house costs 800, and where a weekly grocery bill is about 1; or in nation D, where ongoing inflation is minimal, unemployment is moderate, a typical middle-class wage is 16 million of nation D's currency unit, where a very comparable house costs 32 million, and where a very comparable weekly grocery bill is about 40000?
Which of these countries has the most powerful economy? And which the weakest?:
Japan, Bangladesh, Liberia, Botswana.
Well, taking today's figures from xe.com, and rounding to the nearest unit:
1 USD = 77 Japanese yen
1 USD = 76 Bangladeshi taka
1 USD = 72 Liberian dollars
1 USD = 7 Botswanan pula
If we were to naïvely base our judgement on only these figures, then it's clear that Botswana would have the strongest economy of these four countries. Japan's would be the weakest, being a tiny bit weaker than Bangladesh's or Liberia's.
About ten or so years ago, Italy switched from using the lira to using the euro. The conversion rate was a little under two thousand lire to the euro. Italian people no longer earned lire, they earned euros. They no longer spent lire, they spent euros.
By conducting this switchover, did Italy's economy became suddenly not only stronger than it had been a few years before, but almost two thousand times stronger?
Currency unit size is irrelevant. Please don't insert it into this proposal. (In other words, the "currency" section is fine with me, as it stands at this moment.)
UniSocAll wrote:I don't think that the currency should be used as 'economic strength' factors.
I completely agree.
