Victoria 3 - Dev Diary #12 - Treasury

[Wizzington]

I am quite disappointed to see how clunky and un-granular the tax rate settings are. Why did you get rid of sliders?

There's a few reasons:
* Discrete options are clearer than sliders in what exactly you get for selecting each level
* We don't want players to be babysitting and tweaking their sliders every single week to get the perfect level of taxation/spending because we don't think it's a good gameplay flow
* The idea that a government would be making weekly adjustments to the tax rate without incensing the population is extremely unrealistic and discrete levels allows us to make it so changing the tax level is something that you can't be doing all the time and that changes can have political consequences

 

[Wizzington]

I hope some budget options will be replaced by sliders. Just 5 options to manage a complex economy doesn't sound viable.

There is 5 levels but that doesn't mean there is 5 options, there's a wide variety of different income streams that affect pops differently instead

 

[Wizzington]

Land taxes only collected from peasants? What about the large landowners?

The menu for taxes seems that is open for any type of government, political party or culture. Are there no inventions/technologies/discoveries required to unlock different types of taxes?

Everyone can use everything from the start?

Land taxes will be collected from Peasants, Farmers and Aristocrats

 

[Wizzington]

Diplomatic Pacts is another form of revenue that was shown in the screenshots, but not discussed in the post. Anything you could tell us about those (as a form of revenue source)?

Also, would the divident taxes lower the investment pool contribution directly/indirectly?

There's a few different forms of diplomatic pacts that can generate money such as subject relationships, but we'll get more into that in a later dev diary.

 

[Wizzington]

How is inflation or deflation handled? If alot of countries are poring money into the void of their gold reserves at diminishing returns would this actually effect the game's economy or would it be handled by the in game systems.

Right now we don't have inflation mechanics, it's something we think we'll want in the game sooner or later but likely not for release.

 

[Wizzington]

I'm very curious what "Money from the Investment Fund" refers to as a revenue source. Can governments actually siphon off some money from the Investment Pool depending on the economic system in place?

No, you receive money from it only to cover expenses for the type of constructions it may be used for.

 

[Wizzington]

When it comes to debt that the government needs to pay off, will historical debt from the Napoleonic wars and prior still be something that countries have to pay off. Ie do the British still have the debt that they have to pay off from the South Sea Bubble fiasco.

At the moment we don't have this for most countries, I'm split on the idea in that it would be a nice historical detail but at the same time having countries start the game in a dire financial state may not feel good gameplay wise.

 

[Wizzington]

I am mostly concerned by your mention of tariffs. Tariffs were an extremely huge part of the United States's economic strategy at this time, and a key point of contention between the industrialist north (who wanted high tariffs), and the south (low tariffs).
So the question is: can tariffs be used to protect local industries in vic3 (and not just a way to earn money from exports)?

Yes, the idea with tariffs is that they should both be a way to earn money and protect domestic industries, but we haven't actually finalized and implemented them yet which is why I can't tell you all about how they work.

 

[Wizzington]

Thank you for the clarification. I will reserve judgement until I actually play the game. But I'm just concerned that we may be in a situation where we choose a tax rate which is higher than the optimal one, costing us legitimacy and unrest, only because we didn't have the option to select a rate closer to the optimal one, especially if options are 5-10% apart. But anyway, we'll be able to tell whether that's true when we play the game.

The idea is generally that your income taxes, poll taxes and other such 'base taxes' are determined by laws and you can adjust levels, but you should not be doing this all the time, while you can use more flexible measures like consumption taxes and tariffs if you need to make up a smaller deficit or raise short-term revenue. It's also just a lot less important to have an 'optimal' revenue stream due to the removal of lump sum spending and generous loan system.

 

[Wizzington]

Wait, does this mean that any Investment Pool money used to construct or expand industries gets listed as government revenue until construction is complete? I'm a bit confused why this is listed as such, is it just so the player knows how much money is being taken from the Investment Pool? Does this mean that the government can construct any non-government buildings the Investment Pool doesn't cover and that would be listed as a National Expense rather than as a source of revenue?

The expense for the building is always listed, while any money you're drawing from the investment fund to pay for it is listed as income up to a maximum of the spending. This is done purely for clarity, as before we did so it could be quite hard to understand when you were actually tapping your investment fund.

 

[Wizzington]

It feels like an important thing to have for Haiti, as they owed massive debts to France that they didn't finish paying until like the 1940s, which massively impacted their economic development.

Haiti is a case where we actually have special content for their debts to France.

 

[Wizzington]

Are paying tribute and paying a war reparation from peace deal a source of income/expense in Vic3?

Both of these do exist, but more on that when we talk about diplomacy

 

[Wizzington]

Curious about the construction of buildings.

Looks like they take costs during construction (which I like). I'm curious about a couple of things:

I assume workers need to work on the constructions. If so, where do the workers come from? I can see unemployed people being gobbled up (and a creative use of make work that governments have done to help combat it!), but if employment isn't an issue... do people just move from other jobs into these temporary ones? Is there a pool of construction crew on retainer?

Thanks!

We'll cover construction in a later DD, but it does use both workforce and goods.

 

[Wizzington]

@Wizzington The US image shows the US using taxes except that during this era they largely didn't till they passed the Income tax and relied on tariffs. So I am curious why they are using poll and dividend taxes. I assume that Consumption taxes represents Tariffs but why do they have those taxes?

The US states did collect poll taxes during the era even if the federal government did not. We're also not going to be able to 100% accurately represent which countries collected what taxes and at what level because our economy is not a fully accurate scale model (in general the tax burden compared to GDP is quite a bit higher in Victoria 3 than it was in history, the same is true for both V1 and V2), but we'll try to have at least major themes like the US lack of an income tax represented. Tariffs are not actually implemented yet so that's why they're not there (yet).

 

[Wizzington]

Is debt paid periodically or does it require player action?

So long as you have a positive balance you will continually pay off the national debt using that surplus.

 

[Wizzington]

I notice that your income tax seems to hit poorer strata more.

Is taht because poorer people tend to have their income be specifically from taxes while richer people not? Or is it possible to specify via some other means different levels of flat tax, progressive tax, etc?

It's because the income tax law (Payroll Taxes) is a regressive form of taxation, there are also flat and progressive forms.

 

[Wizzington]

I think it would be great to have some, maybe as a game rule if it’s possible? Im sure players would like the challenge of trying to rescue Countries out of their dire financial situation and the feeling of leading them back to the black.

That is actually not a bad idea, no promises but I'll note it down as something we might do.

 

[lachek]

So the state borrows money from buildings' reserves? Will the state pay interest to the buildings? Will the buildings not be able to use the money they lent?
Or is that all abstracted away?

In the current build of the game, interest payments is purely a negative and disappear into a black hole. We're going to prototype paying that interest out proportionately to Shareholders, so with any luck that's how it will work on release. My only hesitation is that mechanics which favor Pops at the (temporary) expense of the player, or vice versa, aren't clearly "good" or "bad" for the player which presents certain challenges in framing, explanation, and game dynamics. For example, a country that's deep in debt would pay a lot of interest to its captains of industry, who are quite pleased with that as the payments afford them greater luxuries (when actually they should perhaps be worried the debt will be defaulted on, and encourage government austerity and repayment). But if the country manages to climb out of debt, they're now punished by the factory owners who are mad their piles of gold are slightly smaller today.

But this kind of stuff is Vicky through and through, so we're going to do our best to make it work right.

As for the buildings being unable to use the money lent, the way it works is that if a building has to tap into its reserves, if this causes the total Cash Reserves in the nation to shrink below the current debt principal, the country goes into Default. So buildings can still use money lent by basically demanding to be repaid, but while the country is in this state it can declare Bankruptcy and bail on all lenders.

 

[lachek]

Every week vic3 looks nicer and nicer.
I have two questions about this topic though...
1: minting more money would result in some kind of inflation as an adverse effect?
2: would it make sense to increase to the maximum the tax rates to achieve more radicalization? (I mean if it could be a valid strategy in case I deliberately want to create a socialist or some kind of tax heaven country for example) hehehe.
Again, another wonderful dev diary!

1. Minting doesn't have an adverse effect as you're not able to adjust the minting level yourself. It is scaled automatically to a fraction of GDP, to the degree that the money supply is increased in relation to what's needed to prevent deflation but not enough to cause inflation. If we ever decide to add monetary policy settings though, this is exactly where it would hook in

2. Oh yeah, absolutely. Punitive tax rates on specific segments of the population - which can also be precisely targeted by high taxes on specific consumer goods - to build radicalism to power up certain popular movements is a perfectly valid galaxy brain move.

 

[lachek]

I’m a bit worried that a low-tech building, if I understand correctly, if slightly profitable, would have exactly the same cash reserve as a high-end super profitable one, so debt capacity will be linked to number of buildings and not actual GDP. Would you consider linking part of the debt capacity to high strata pops wealth, to represent investment in government bonds, and also to reward “tall” play?

It's linked to level of building, and can also vary by type. So a Wheat Farm might have a lower Cash Reserve maximum per level than a Steel Mill. In practice "high-end super profitable" industries will be expanded while lower-tech ones will become irrelevant, so most of your debt ceiling will be provided by those industries. Similarly, rich high strata Pops will be the Shareholders in those buildings, so it's actually "their" wealth we're representing.