"+21.4% Tax Waste"

[DominusNovus]

I’m guessing some combo of the first two - POPs pay less in taxes, and what they do pay is just as likely to go to the tax collector as they government. The latter being just a way to counter the 100% tax rate exploit.

 

[Subcomandante]

I’m guessing some combo of the first two - POPs pay less in taxes, and what they do pay is just as likely to go to the tax collector as they government. The latter being just a way to counter the 100% tax rate exploit.

I don't get it. If the bureaucrats pocket some of it, don't they just spend it on goods and let it flow back into the circulation?

 

[VineFynn]

Because I don't think they are recycling the closed economy.

There was no closed economy in vicky 2?

 

[Subcomandante]

This thread is now totally confusing
Nobody knows what they're talking about because no info is out yet

 

[balmung60]

My read is that "tax waste" is a multiplicative penalty to tax income. So if you have 100% tax waste, you have no tax income.

 

[Hemothep]

There was no closed economy in Vicky2. There were several sinks where money got either deleted or trapped.
While this wasn't intentional, I don't think there will be intentional sinks in Vicky3.
I also don't think money that improves Standard of Living will get deleted from the system.
Wiz knows of the liquidity crises that plagued Vicky2s end game. I can't believe he'll design something that leads to the same result.

 

[Cinigs]

This is my main concern for this matter.

A secondary concern is that you could counter it by raising the theoretical tax level as in Victoria 2.
Say a POP needs $60 to buy goods and be happy. His income is $100. The desired practical tax level would be 40%.
If there would be 20% 'tax evasion', the required theoretical tax level would be 40% / (100% - 20%) = 50%. If it works like this, I can counter a insufficient bureaucracy by increasing the tax levels, whilst my pops don't care (they still end up with $60 to spend on their goods).

If it works like that (and it does in Victoria 2), then there is no incentive to improve the bureaucracy.

I think the best way to balance this (and the most realistic way) would be to have tax waste be random. So instead of every one paying 50%*(100%-20%) = 40%. 80% pay the 50% and then the 20% pay nothing so their tax is wasted. The happiness penalty from paying an extra 10% is probably more than 4 times the bonus for paying nothing, so you have an incentive to hire the proper amount of bureaucrats. Also this is how it will work in the real world. There being a shortage of tax collectors means they will skip some villages not just still go to collect taxes everywhere but not tax as much as they should. To make it even more realistic, the randomness could be weight so more remote (rural, distance from capital, etc) are more likely to get skipped if there is tax waste.

 

[Haresus]

The Vicky2 problem of "just increase the slider" is partially solved in Vicky3 because there are no sliders. Presumably you can't tax anyone to 100%, because that would be nonsensical, and maybe there's a political cost to changing the tax laws.

So most likely tax waste is just a penalty to how much money is collected. If you have a lot of tax waste, your people are taxed less because your bureaucrats are unable to uphold an effective system that keeps track of where people are and how much they owe the state.

 

[Kompetan]

Let’s think of an bureaucrats shortage you become the sole government representative to 10 villages. Now thinks that happen is villages influential chracters and bullies may choose not to pay increased bureacracy can show these people governments hand reach deeper and they should pay - tax lost. You collect all the others but you think you are underpaid for the job you make it serm like only three quarter of the taxpayer alive keep rest increasing bureaucrats decreesr this becusa there is other people you have to try to convince to do same - embezzling tax.
1 bureaucrat might not even cover the whole area he is assignned to in a year which created collection problems. - tax inefficiency

So I hope that when we tax %100 then some people pay that some none some a percantege so that we can see revolts about high taxation or social inequality and reforms

 

[Leoreth]

The idea of bureaucrats pocketing some of the taxes makes sense in isolation, but not in relation to tax inefficiency. We already know that tax inefficiency arises when you are over your bureaucratic capacity, which you can address by employing more bureaucrats. It does not make sense that you can address bureaucratic corruption by simply employing more bureaucrats, who are just as likely to be also corrupt. Imo the best way to model tax collector corruption is to implicitly assume it as part of their wages.

I think one point that people are missing with the "untaxed money due to inefficiency should stay with the pops" model and that Vic2 also got wrong, is the assumption that people will know in advance that they will be undertaxed. In an overburdened bureaucracy, taxes would likely be random, both in its point in time and the amounts demanded (higher and lower than what is legally owed), with the threat of backpay and brutal punishments especially in despotic countries.

The idea that such an environment fosters a lucky group of people with more disposable income is a fairly rosy view. Most likely people will be scared to spend any excess money beyond what is needed for living expenses, in fear of the taxman showing up after all. Others will have their livelihood destroyed because the taxman does come for them in the end or demands more than is owed due to some error. This is also an environment that makes people in general wary of investment.

The idea that 25% tax rate at 100% efficiency and 50% tax rate at 50% efficiency are the same is grievously wrong. They may result in the same government revenue but the latter will be exponentially more destructive to wealth and standard of living.

In game, I think the best way of modeling this would be to make the maximum tax rate that can be effectively collected a function of bureaucratic capacity. If it is exceeded, not only does the state receive diminishing returns in revenue, but also there should be penalties to the growth of standard of living and investment as economic security in the population decreases overall.

 

[General WVPM]

I think one point that people are missing with the "untaxed money due to inefficiency should stay with the pops" model and that Vic2 also got wrong, is the assumption that people will know in advance that they will be undertaxed. In an overburdened bureaucracy, taxes would likely be random, both in its point in time and the amounts demanded (higher and lower than what is legally owed), with the threat of backpay and brutal punishments especially in despotic countries.

The idea that such an environment fosters a lucky group of people with more disposable income is a fairly rosy view. Most likely people will be scared to spend any excess money beyond what is needed for living expenses, in fear of the taxman showing up after all. Others will have their livelihood destroyed because the taxman does come for them in the end or demands more than is owed due to some error. This is also an environment that makes people in general wary of investment.

The idea that 25% tax rate at 100% efficiency and 50% tax rate at 50% efficiency are the same is grievously wrong. They may result in the same government revenue but the latter will be exponentially more destructive to wealth and standard of living.

In game, I think the best way of modeling this would be to make the maximum tax rate that can be effectively collected a function of bureaucratic capacity. If it is exceeded, not only does the state receive diminishing returns in revenue, but also there should be penalties to the growth of standard of living and investment as economic security in the population decreases overall.

I Agree

The idea of bureaucrats pocketing some of the taxes makes sense in isolation, but not in relation to tax inefficiency. We already know that tax inefficiency arises when you are over your bureaucratic capacity, which you can address by employing more bureaucrats. It does not make sense that you can address bureaucratic corruption by simply employing more bureaucrats, who are just as likely to be also corrupt. Imo the best way to model tax collector corruption is to implicitly assume it as part of their wages.

The Roman bureaucracy was overburdened by the rapid conquests during the late republican era. The Romans decided to hire tax collecting companies that just had to deliver a set amount of cash from a region. These companies tended to collect more taxes and keep the difference as profit. So this system would make sense historically.

 

[Dranok_345]

Since lack of bureaucracy means not enough bureaucrats, I choose the first option.

 

[nuarbnellaffej]

I hope this is not the case. Something like this would ruin the game's closed economy. Either that or it would mean that they have abandoned the close economy of vicky 2.

Both of which would be ruin what made vicky, vicky.

Vicky 2 didn’t have a closed economy, it was intended to be closed, but there was a bug somewhere in the code that caused money to disappear so they ended up having to put in a money injection spring to counter it. They tried hard to find the bug but never succeeded.

 

[nikkythegreat]

Vicky 2 didn’t have a closed economy, it was intended to be closed, but there was a bug somewhere in the code that caused money to disappear so they ended up having to put in a money injection spring to counter it. They tried hard to find the bug but never succeeded.

Yes, vicky 3 would give them that opportunity to get a really closed economy since they won't have that bug anymore.

 

[Skales]

Yes, this was the reason for my suggestions above.



I actually wrote a really long detailed explanation for this suggestion, but then eliminated 90% of it for just a few lines. My fear was that no one would read a long wall of text.

The long explanation went like this:

In the EUIV era, governments did not have the bureaucratic capacity to efficiently tax citizens. Instead, they employed two techniques to collect taxes:
1) They taxed citizens as a collective (an entire town instead of on an individual basis).
2) They employed tax farmers to collect taxes for the government.

There were a few problems with these systems.
Problem 1 - To tax citizens as a collective, someone still needed to be in charge of assessment and collection. This was someone of importance in the town who was almost always amongst the wealthiest members of the town. This person would manipulate the assessment/collection to shift the burden of taxation off of the wealthy members of the town and onto the middle class/poor.

Thus, my first suggestion: Bureaucracy shortfalls should result in tax evasion, but disproportionally by the wealthy.

Problem 2 - When tax farmers are employed, you run into two scenarios.
Scenario 1 - The tax farmer bids to collect a share of the taxes. So, I might bid to collect taxes in return for 10% of the taxes (so the state receives 90%), while you might undercut me and bid 8%. As I recall, governments tried this system and the result was that revenue shortfalls were common. Revenue shortfalls are a huge problem, so governments tried...

Scenario 2 - The tax farmer bids to pay the government money up front (maybe it is just part of the sum, but there is an up front payment of some kind), then tax collection is to recoup their investment. So, I might bid to provide the government $10 million up front in return for collecting taxes, while you might bid to provide the government $12 million.

The benefit of this system is that it created dependable income for the government (the government was paid up front) and any shortfall in revenue was the tax farmer's problem. The problem with this scenario is that it encouraged tax farmers to overtax and made tax farmers *fanatics* about tax collection. Governments provided tax farmers with the power to audit, harass, arrest people to collect taxes and tax farmers used it. They were rapacious and nasty. Tax farmers were the most hated class in ancien regime France and amongst the first to go to the guillotine.

Thus, my second suggestion: Bureaucracy shortfalls should result in bureaucrats becoming wealthy, abusing their position to overtax for their benefit, and generally creating unrest.

A final comment:
Yes, I am aware that the examples above come from bureaucratic problems during the EUIV era and this game is set in the Victorian era. I just think that the bureaucratic challenges/outcomes from the EUIV era could be used to model the results that would occur during the Victorian era when there is a bureaucratic shortfall. Effectively, you could think of it as a country that lacks the bureaucratic capacity to govern as being forced to fall back on methods from the previous era.



The U.K. had the most effective bureaucracy during the time period. The methods that the U.K. used are instructive to understand what a shortfall in bureaucracy would actually mean.
1) monitoring/oversight - A bureaucrat would monitor what other bureaucrats were doing.
2) penalties - A bureaucrat who did something that they should not were punished/fired.
3) rotations - A bureaucrat would not spend too much time in one place to create relationships with the local population, which would encourage corruption.

If there is a bureaucratic shortfall, then you could assume that there is no oversight or penalties for poor behavior or rotations. That is why corruption would increase and bureaucrats would be more likely to misbehave.

Man, this is exactly the type of post that makes me want to have a game set in the EU timeframe but with the detail of Victoria...

 

[dunka2]

Yes, this was the reason for my suggestions above.



I actually wrote a really long detailed explanation for this suggestion, but then eliminated 90% of it for just a few lines. My fear was that no one would read a long wall of text.

The long explanation went like this:

In the EUIV era, governments did not have the bureaucratic capacity to efficiently tax citizens. Instead, they employed two techniques to collect taxes:
1) They taxed citizens as a collective (an entire town instead of on an individual basis).
2) They employed tax farmers to collect taxes for the government.

There were a few problems with these systems.
Problem 1 - To tax citizens as a collective, someone still needed to be in charge of assessment and collection. This was someone of importance in the town who was almost always amongst the wealthiest members of the town. This person would manipulate the assessment/collection to shift the burden of taxation off of the wealthy members of the town and onto the middle class/poor.

Thus, my first suggestion: Bureaucracy shortfalls should result in tax evasion, but disproportionally by the wealthy.

Problem 2 - When tax farmers are employed, you run into two scenarios.
Scenario 1 - The tax farmer bids to collect a share of the taxes. So, I might bid to collect taxes in return for 10% of the taxes (so the state receives 90%), while you might undercut me and bid 8%. As I recall, governments tried this system and the result was that revenue shortfalls were common. Revenue shortfalls are a huge problem, so governments tried...

Scenario 2 - The tax farmer bids to pay the government money up front (maybe it is just part of the sum, but there is an up front payment of some kind), then tax collection is to recoup their investment. So, I might bid to provide the government $10 million up front in return for collecting taxes, while you might bid to provide the government $12 million.

The benefit of this system is that it created dependable income for the government (the government was paid up front) and any shortfall in revenue was the tax farmer's problem. The problem with this scenario is that it encouraged tax farmers to overtax and made tax farmers *fanatics* about tax collection. Governments provided tax farmers with the power to audit, harass, arrest people to collect taxes and tax farmers used it. They were rapacious and nasty. Tax farmers were the most hated class in ancien regime France and amongst the first to go to the guillotine.

Thus, my second suggestion: Bureaucracy shortfalls should result in bureaucrats becoming wealthy, abusing their position to overtax for their benefit, and generally creating unrest.

A final comment:
Yes, I am aware that the examples above come from bureaucratic problems during the EUIV era and this game is set in the Victorian era. I just think that the bureaucratic challenges/outcomes from the EUIV era could be used to model the results that would occur during the Victorian era when there is a bureaucratic shortfall. Effectively, you could think of it as a country that lacks the bureaucratic capacity to govern as being forced to fall back on methods from the previous era.



The U.K. had the most effective bureaucracy during the time period. The methods that the U.K. used are instructive to understand what a shortfall in bureaucracy would actually mean.
1) monitoring/oversight - A bureaucrat would monitor what other bureaucrats were doing.
2) penalties - A bureaucrat who did something that they should not were punished/fired.
3) rotations - A bureaucrat would not spend too much time in one place to create relationships with the local population, which would encourage corruption.

If there is a bureaucratic shortfall, then you could assume that there is no oversight or penalties for poor behavior or rotations. That is why corruption would increase and bureaucrats would be more likely to misbehave.

I feel also for the sake of the closed system that either 'tax waste' means that a certain proportion of taxes go uncollected or your second suggestion where bureaucrats pocket that percentage. Either of these choices would keep the money flowing within the system while simply having the money vanish would cause countless problems.

As for which would likely happen with a (I'm assuming) well-paid bureaucracy that is simply understaffed, I'd lean towards the latter. Besides candidate screening, the best (and proven) way to ensure rule-abiding bureaucrats is by paying them enough, so the likely result of an overworked bureaucrat, like any employee, is that stuff falls through the cracks.

I do think this should cause unrest in addition to lost taxes though as overstretched bureaucrats mean that the entire business of government slows to a crawl, annoying everyone and causing countless problems. Not only are the taxes going uncollected, the bills and wages are probably falling behind, and everything else that a government does.

 

[C.D. Howe]

The Roman bureaucracy was overburdened by the rapid conquests during the late republican era. The Romans decided to hire tax collecting companies that just had to deliver a set amount of cash from a region. These companies tended to collect more taxes and keep the difference as profit. So this system would make sense historically.

The system of tax farming also took place during the time of Victoria 3. The Ottomans took until the middle of the 19th century to officially abolish the system, but they were unable to fully move to more efficient forms of taxation until the 20th century according to some accounts. The inability of the Ottomans to achieve financial reform really hampered their attempts at ambitious reforms during this period.

 

[FleetingRain]

This is my main concern for this matter.

A secondary concern is that you could counter it by raising the theoretical tax level as in Victoria 2.
Say a POP needs $60 to buy goods and be happy. His income is $100. The desired practical tax level would be 40%.
If there would be 20% 'tax evasion', the required theoretical tax level would be 40% / (100% - 20%) = 50%. If it works like this, I can counter a insufficient bureaucracy by increasing the tax levels, whilst my pops don't care (they still end up with $60 to spend on their goods).

If it works like that (and it does in Victoria 2), then there is no incentive to improve the bureaucracy.

Well, it says tax waste, not taxation inneficiency. So my guess is that you'll tax 50% but receive only 40%, so the pop gets the short end of the stick.

 

[wickermoon]

Just for clarification: Why do people assume that Vicky3 has a closed system? As far as I know there's no indication to that. I also think that Vicky 2 hadn't had a closed system, had it? I mean maybe I'm wrong, maybe vicky2 had a closed system?

 

[Helmic____]

The main money sink in Vicky2 that caused the liquidity crises wasn’t really bugs nor events. It wasn’t even the fact that money disappeared when building buildings. It was that all the money that capitalists made from factory profits were put into the bank where only governments, not pops, could access it. Most of the money was still in the game, it was simply inaccessible for most of the economy. Thus V2 proved that trickle down economics doesn’t work.