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As I have shown in http://forum.game-labs.net/index.php?/topic/15026-pvp1-july-tobbies-tobacco-imperium/ there is a large spread between bid and ask prices.

 

This spread is only caused by the 5% sales/buy tax which is currently implemented. Not only does this hurt the liquidity of the market it is also very much a PvE construct.

https://en.wikipedia.org/wiki/Value-added_tax#Comparison_with_sales_tax

 

In fact, if we were to implement it as a VAT, it would still be a deadweight loss and hurt our PvP market.

https://en.wikipedia.org/wiki/Value-added_tax#Limitations_of_VAT

 

Furthermore, it is historically complete inaccurate to have sales tax. (Who would have thought I would find a historical argument. :lol: )

There was only "Window Tax" and "Income Tax". (Actually a bit more, but hey, who cares about historical details. :P )

https://en.wikipedia.org/wiki/History_of_taxation_in_the_United_Kingdom#18th_century

 

So what is the purpose of the 5% tax on contracts?

 

Absolutely nothing!

 

Rise brother and sister captains! No more taxes! Join the revolution!

 

https://en.wikipedia.org/wiki/List_of_historical_acts_of_tax_resistance#18th_century

Edited by Skully
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So what is the purpose of the 5% tax on contracts?

 

Absolutely nothing!

 

To curb sales contracts that simply add +1 gold to whatever contract is currently in place, leading to the ridiculous flooding of people literally one-upping one another again and again.

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I should suggest that the availability of resources to become dynamic and not fixed, leading to overflow and shortages events and make the market, smuggling and trade very important.

 

Without any type of regulation, made by players ( aka. force low prices by selling more with smaller margins ), reducing the 5% / 10% will simply means that the greedy trader/crafter will keep the price at level while having 5% less in expenditure.

 

European Powers must Tax directly on production ( not on market value ) to suppress the needs of the Ports.

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I should suggest that the availability of resources to become dynamic and not fixed, leading to overflow and shortages events and make the market, smuggling and trade very important.

 

 

 

 

We plan to address resource distribution and prices and supply/demand after alliances/politics/port battles

Hopefully it will become more exciting..

 

but we are worried about a compass wood case - where some players really preferred a guaranteed trade where they can just make money by bringing goods from point a to point b ))

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To curb sales contracts that simply add +1 gold to whatever contract is currently in place, leading to the ridiculous flooding of people literally one-upping one another again and again.

post-11395-0-57703300-1467886210_thumb.jpg

 

Yup, the 5% works perfectly against that. :rolleyes:

 

If anybody wants to safe a penny, he can work the floor. Just like in real life. :P

post-11395-0-57703300-1467886210_thumb.jpg

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We plan to address resource distribution and prices and supply/demand after alliances/politics/port battles

Hopefully it will become more exciting..

 

but we are worried about a compass wood case - where some players really preferred a guaranteed trade where they can just make money by bringing goods from point a to point b ))

 

Fair point with the steady flow. I can see that it establishes a balance.

 

What if NPC trade is dynamic regarding amount of player production ? Meaning the more production buildings are built in a port the less quantity of NPC production/EU imports.

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Fair point with the steady flow. I can see that it establishes a balance.

 

What if NPC trade is dynamic regarding amount of player production ? Meaning the more production buildings are built in a port the less quantity of NPC production/EU imports.

Take it one step further. Set the NPC production at a low fixed amount, so 1 or 2 player producers can outproduce the NPC. Then it doesn't matter if the NPC offers goods at market value. As I've shown in the Tobacco case.

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If it's implemented correctly in the future, a sustainable trade is only possible through waging a sustainable war in the West Indies. If I could get a national discount on certain things (e.g. drafted crew or confiscated guns and supplies in the name of the Prince), I'd be more than happy to pay some taxes.  ;)

Edited by Lytse Pier
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Without any type of regulation, made by players ( aka. force low prices by selling more with smaller margins ), reducing the 5% / 10% will simply means that the greedy trader/crafter will keep the price at level while having 5% less in expenditure.
post-11395-0-64103700-1467916083_thumb.jpg

 

The greedy trader will get it any by simply outbidding the penny trader smartly. And while I said I would bid at $622, I don't have to because nobody will take me on. Lets see how long I can control the price. :P

 

So this whole thing of putting in a 5% sales tax is futile for the goals you are seeking to attain. It should simply be a true PvP free market, with a low PvE bootstrap, so no tax.

post-11395-0-64103700-1467916083_thumb.jpg

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All right. Colonies pay taxes to their rightful rulers. Free men and women from the independent smuggler and freebooter towns do not :) ( yes, bloody nationals pay tax, pirates do not !!! freedom! )

 

After all many free ports started as "tax free" locations ;)

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I actually advocate tax on everything, going to the player's nation who pays the tax.  Smuggler however can bypass this:

 

 

 


This idea came about while trying to think of how smuggling can play into the game more so than it does now.
 
 
First off, lets talk about Taxes.
 
Instead of how it is right now, taxes need to go to the nation of the person who pays the tax (i.e, the contract placer or the ship lister).  It doesn't matter what port the player is in, whether freetown or their respective nation (for this discussion, I treat pirates as a nation), the tax goes to their nation and is used by their nation in some way.  
 
New taxes
Ships sold to the npc store should have a 5% tax
Ships bought have a 5% tax.
Trade between players now has a 5% tax to both sides.
Trade between other nation players has an extra 5% tax.
The secondary party in contracts (the one who fulfills the contract either by buying the contract or selling to the contract), now has a 5% tax.  It isn't just the placer of the contract anymore.
 
What tax is used for
The tax money accumulated could be automatically used like this:
 
up to 25% decrease in port conquest activities.  So contention is *up to* 25% faster or slower (or a decrease in flag price in the current mechanic).
slightly better allies in missions, and I mean slightly.
slightly better patrolling ai fleets (slightly)
better defenses near ports
 
Smuggling
Here is where smuggling comes in.
 
Smuggling is an officer (in my and other people's proposed changes to officers) or an officer trait (how it is currently).  It can only be enabled by those who use a point on the smuggling trait.
Purchasing the smuggling trait removes the ability to get some officer traits, such as marine that I list here and some others or any already present traits that are equivalent (such as pirate hunter and others).
Smugglers can only be used on 5th rates and down - 5th, 6th, and 7th rates.
Smugglers pay no taxes whatsoever, whether they buy from contracts, place contracts, buy ships, place ships or trade.  
People buying from smuggler contracts pay no taxes.
Smugglers get increase in cargo hold by 50%
Anytime smuggler is enabled, it is enabled for 8 hours and cannot be disabled until after the 8 hours are up.  Anytime a smuggler bypasses taxes, it enables smuggler for 8 hours and it cannot be disabled.  This means if a smuggler buys from a contract, sells to a contract, trades, buys a ship, sells a ship, or someone fulfills a smuggler's contract by either selling their items to a smuggler or buying a smuggler's items, it enables smuggler for 8 hours.
 
Effects
Nation mates of smugglers want to kill smugglers because they are bypassing taxes, which means they can sell for cheaper and they don't contribute to the nation's defenses.  Enemy nations want to kill smugglers because they can smuggle in cheaper goods to their towns and bypass taxes, which hurts their national war effort.
 
 
Thoughts?
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I was thinking something similar on smuggling, but instead of taxes going to cheaper conquest, have taxes go to maintaining further out outposts. Say, 10,000 in taxes per port per week, or the furthest out outposts slip to neutral. (Number just for example.)

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Yup, the 5% works perfectly against that. :rolleyes:

 

If anybody wants to safe a penny, he can work the floor. Just like in real life. :P

 

 

Obviously it still happens, just not even remotely as much as it would if you got it your way. Which is why people who do it aren't putting up thousands of units in their contracts either, because then the 5% screws them over, so they have to replace the contract often to be on top.

Edited by Guest
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I was thinking something similar on smuggling, but instead of taxes going to cheaper conquest, have taxes go to maintaining further out outposts. Say, 10,000 in taxes per port per week, or the furthest out outposts slip to neutral. (Number just for example.)

I probably shouldn't have mentioned taxes. :P

 

While I do think we should consider tax schemes in another topic, I want to focus here on the current transaction cost. This is now fully comprised of a 5% addition going into a black hole. Why?

 

Or as Oliver Eaton Williamson, Nobel Memorial Prize winner in Economic Sciences, said "The economic counterpart of friction is transaction cost.".

 

I think it was Kenneth Arrow, another Nobel Prize winner in Economics, who said "Market failure is not absolute; it is better to consider a broader category, that of transaction costs, which in general impede and in particular cases completely block the formation of markets."

 

So while a proper taxation mechanism might have a place in Naval Action, right now the money disposal rule of 5% is just hindering the market.

For now, it should be turned to 0%. (Potentially an easy change, probably doesn't need to wait for a full content patch. :P )

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Have you looked into game design?  There have to be money sinks.  There can't just be faucets.  If you take away the transaction fee (a money sink), you have to take away the faucets as well, such as damage you cause to an enemy ship, or no cost for using labor hours, or how many ship wrecks there are.

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Have you looked into game design?  There have to be money sinks.  There can't just be faucets.  If you take away the transaction fee (a money sink), you have to take away the faucets as well, such as damage you cause to an enemy ship, or no cost for using labor hours, or how many ship wrecks there are.

It is not much different than real life, although we want a virtual economy to be perpetual with an unknown number of players.

 

It all boils down to inflation control and finding the right way to create the money sink.

 

For example: http://www.taxhistory.org/civilization/Documents/Fiscal/hst29026.htm

Or: http://www.alteraeon.com/articles/gold-balancing-in-mmos.html

 

The reason we have no sales / transaction tax such high in real life is simply because it stagnates the market. In game it effects to the same thing.

 

As for real money sinks we need, that should be a different topic. (Infinite bottles leading into the Golden Monty Haul...  :lol: to be continued. ;))

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To continue on the Ruatan market:

 

post-11395-0-30681400-1467966935_thumb.jpg

 

Another penny trader is trying to shuffle in.

 

post-11395-0-73487500-1467966936_thumb.jpg

 

So here comes a real trader :P and he simply puts his money where his mouth is.

 

Assuming the ask price of the NPC producer at $500 and the bid price of the NPC consumer at $750, it means a mid-price of $625. (Ah crap I was still calculating with $525, so mid-price $638.)

 

I did deduct a 5% accident fee, which is realistic transportation pricing. (Although nowadays it's more like a fixed fee.)

 

So the price breakdown becomes:

Mid-price      $638
Contract cost   $15-
Accident Fee    $30-
===================
               $593

Tossed in an extra $ for effort. ;)

 

Note that with $625 mid-price, you get $581 bid.

 

Now lets see other folks put their money where their mouth is. :D

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I should suggest that the availability of resources to become dynamic and not fixed, leading to overflow and shortages events and make the market, smuggling and trade very important.

 

Without any type of regulation, made by players ( aka. force low prices by selling more with smaller margins ), reducing the 5% / 10% will simply means that the greedy trader/crafter will keep the price at level while having 5% less in expenditure.

 

European Powers must Tax directly on production ( not on market value ) to suppress the needs of the Ports.

 

This is how it should be, yes.

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I should suggest that the availability of resources to become dynamic and not fixed, leading to overflow and shortages events and make the market, smuggling and trade very important.

This is already the case. For Compass Wood we have overflow, for Tobacco we have shortages (at the moment). The Tobacca shortage can be countered by players doing production.

 

Without any type of regulation, made by players ( aka. force low prices by selling more with smaller margins ), reducing the 5% / 10% will simply means that the greedy trader/crafter will keep the price at level while having 5% less in expenditure.

 

European Powers must Tax directly on production ( not on market value ) to suppress the needs of the Ports.

post-11395-0-33767500-1468002612_thumb.jpg

 

It is not the 5% that keeps the price level, it's is offering a fair price that keeps it level.

 

Meanwhile the 5% just incurs market friction. It dissuades people from doing contract trades as on direct trades no money is lost. So the greedy trader/crafter simply doesn't show up on the market. He'll go out of his way for direct trades. (See also the Medkits Large I put up for sale at $45000 (excl. 5% tax).)

 

https://www.quora.com/What-is-meant-by-Market-Friction

 

So because of this 5% (and combined with other factors), this makes the contract mechanics, for the most part, a non-function and wasted functionality.

 

Now we've only covered a product that does one transaction step, picture a more complex product (for example Large Carriages) that contain multiple steps and picture the full loss if you go through contracts.

 

European Powers must Tax directly on production ( not on market value ) to suppress the needs of the Ports.

Can you elaborate on this one? I don't understand it fully.

 

This is how it should be, yes.

Why?

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It is not much different than real life, although we want a virtual economy to be perpetual with an unknown number of players.

 

It all boils down to inflation control and finding the right way to create the money sink.

 

For example: http://www.taxhistory.org/civilization/Documents/Fiscal/hst29026.htm

Or: http://www.alteraeon.com/articles/gold-balancing-in-mmos.html

 

The reason we have no sales / transaction tax such high in real life is simply because it stagnates the market. In game it effects to the same thing.

 

As for real money sinks we need, that should be a different topic. (Infinite bottles leading into the Golden Monty Haul...  :lol: to be continued. ;))

 

Sales tax/transaction tax is higher in real life in the US.  In my area it is currently 6%.  Sometimes it has gone to 7%.  In Chicago, it is 10.25%.  On top of that you have income tax, where I pay somewhere between 20-25% when you include fica.  There is also property tax and other taxes.  Do we need a tax on outposts, on every single transaction, including npc store?

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Sales tax/transaction tax is higher in real life in the US.  In my area it is currently 6%.  Sometimes it has gone to 7%.  In Chicago, it is 10.25%.  On top of that you have income tax, where I pay somewhere between 20-25% when you include fica.  There is also property tax and other taxes.  Do we need a tax on outposts, on every single transaction, including npc store?

US sales tax is actually a retail tax, not a transaction tax. https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

 

Thou lucky artless hell-hated lout, I pay a shitload more tax. :P

 

For the actual taxation I want to create a new topic (or maybe folks want to create a top-level one?). But you have also highlighted the problem that current in game the transaction cost isn't applied uniformly. Now it could be argued this is to encourage player interaction, the actual result is players ignore contracts and go for the direct NPC transactions (less hassle, quick buck).

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