Financial Reform Bill

[Andreas the Wise]

I'm not doing this in bill form yet, partly because it needs debate, and partly because this is the first time I've actually looked at the lawbook on the wiki (Hesam, you're not legally allowed to smoke in public ...) and I'm a little unsure about how exactly to do this as a bill.

Three parts to be discussed:

1. Distribution of Erb
I'm proposing we create another 2000 erb for the Crown Account, bringing the total in circulation to 7000. See http://shireroth.kuroshiro.net/forum/vi ... 15#p109715.


2. Taxation
I'm proposing taxation be auto-triggered whenever the Crown Account has less than 1000 erb in it (that leaves us enough to pay out Kaisers and Stewards without going bankrupt). It'd go something like this:

Taxation
- That there be established a "Safety Amount", initially established at 1000 erb, whereby when the Crown account falls below such an amount, a general tax is triggered.

- That the tax be administered by the Minister or Junior Minister when they see the Safety Amount has been reached, without requiring individuals to send the funds to the Ministry themselves.

- That the tax be rendered on all citizens of the Republic at 20 erb per person. If someone is unable to pay the tax, the money will be taken out of their business account (if applicable). If a person is still unable to pay the tax, it is at the minister's discretion whether they will be rendered exempt, or whether their Duke must make up the shortfall.
OR
- That the tax be rendered on each Duchy within Shireroth at a rate of 100 erb per Duke. The Duke may then tax zir subjects as ze sees fit to recoup the loss. If a Duke is unable to pay from his personal account, he shall be issued a notice of this and have one week from the issuance of the notice to raise the necessary funds within zir Duchy.

- That the level of taxation may be changed at the discretion of the Minister, as long as he warns the populace at least 1 week before taxation at the new levels.

The bit that I particuarly want discussion on is which type of tax is most appropriate - a plain head tax, or a tax per Duchy?

3. Salaries for ministers
These are paid out of the crown account, obviously. The question is: How often, how much, and what strings are attached? (strings like - do we pay all ministries equally? Do we only pay them if they do something during the time period? Do we pay more to more active ministries? Does that change over time etc?)
To throw some basic ideas out there, how about:
Ministers paid on the first of every month
Ministers are paid at a base rate of 20 erb, with it going up to 50 depending on how much work is involved in the Ministry.
Junior Ministers (which technically I need to appoint Hesam through Landsraad, according to VI. H) are paid at a base rate of 10 erb, going up to 25 depending on how much work is involved.
The Landsraad has a period of 1 week from the payment of wages to reverse an automatic payment if they believe the minister in question hasn't done enough work to earn it.

[Malliki]

How about other government officials? *Looks hopeful*

BTW: http://shireroth.kuroshiro.net/forum/vi ... 180&t=8768

[Yvain Wintersong]

1. Noooooooo! That devalues all the money we have now by ~30%, and shakes confidence in the future stable value of money. It sends a message that the government is willing to print more money whenever there's a problem. People will be less likely to want to work hard, because they don't know what the value of their work will be two days later. If the Crown account is dangerously low, let's start taxing ASAP. And let's get an Imperial Decree that no new money will ever be printed, except in specified conditions, so we don't always have to worry about this.

2. An auto-tax at a certain amount provides no incentive for the Kaiser to keep to a budget. It also threatens the value of money; if the Kaiser wants to build a big military, he can tax everyone into the ground and end up with one citizen who owns the military supplies company having all the money. From an out-of-game point of view, it also provides less incentive for the kind of budgetary haggling that makes following real life economies so interesting.

I prefer the tax per Duchy, because it adds another dynamic and another opportunity for Duchies to distinguish themselves from one another. One could be despotic and seize the money from unpopular people, one could be democratic and have a legislature determine the tax rate, and one even could be communist and hold all money in a big pool.

3. I don't know if I want Minister salaries. Many Ministers don't do any work (including myself, sadly). Paying six people plus their assistants each month would be a strain on the Treasury. And a salaried system is just boring. I suggest Ministers be paid bounties for good work the same way normal citizens are. A Ministry position would be economically beneficial because it provides an opportunity to earn bounties that would otherwise be unavailable. For example, the Minister of the Exterior might negotiate a brilliant alliance and claim a bounty for it, an option unavailable to a normal non-Minister citizen.

[Ari Rahikkala]

I might be biased as MiniInt, but... I move that ministers do get paid regular salaries, but heavily tiered according to how much regular administrative work they tend to have. You know, the kind of work that tends to consist of doing a bunch of little things almost every day and that should just get done without anyone but the minister having to even think much about it.

(I was thinking of three tiers originally, but MoMA and MiniInfo are so overwhelmingly on the creative side of the creative-administrative continuum that I think they can just be handled with the bounty system)

- MiniInt and MiniTrade in the 20-40 range (MiniInt is the most consistently busy ministry currently, and I'm pretty sure that MiniTrade will continue being very busy too)
- MiniEx and MiniImNat in the 5-20 range (they've got a couple of little administrative things to do for every new citizen and treaty, plus maybe censuses although I think those haven't been running regularly lately, but a lot less gruntwork than MiniInt and MiniTrade)



Aside that, I move that ministries get budgets of maybe 100 erb/month to use for contracting out or commissioning work, with more available given Landsraad permission. The protocol for using this money would be that the minister would describe the job to be done in public and call for bids (i.e. the money can't be used for bounties). Maybe with some kind of restrictions (a minimum open time, etc.) to make sure they don't just feed the money into their own duchy .

[Yvain Wintersong]

You're right about the Ministries that have non-glorious administrative work. I didn't include that in my Bounty bill, but I will before I propose it to the Landsraad.

A budget of 100e/ministry/month seems excessive, though. With six Ministries, that means the Crown needs to spend 600/month on Ministry budgets alone. If Andreas' tax proposal passes, the Crown will most likely be getting only 500e/month total (5 duchies * 100 erb or 25 citizens * 20 erb). We should probably be basing our spending plans on that figure.

[Erik Mortis]

I would suggest taxes be based on percentages and not set rates.

[Ari Rahikkala]

Humm... actually, the 100 / month was meant to be the upper limit, under the assumption that most ministries wouldn't be using the money most of the time... but yeah, that *is* a pretty fragile assumption to make. 50 maybe?

[hypatias mom]

Actually, different ministries seem to have different work-loads. For example, the Minister of the Interior and the Minister of Trade are called upon nearly every day to do work for the country. My ministry and the Ministry of the Exterior seem to have a more intermittant demand for our work. I would assume the ministers would be ompensated with some attention paid to this factor. This is my personal observation, however, and would need consideration and discussion rather than unthinking approval.

[Andreas the Wise]

I think there's merit for the paying ministers by bounty. It does mean they get paid when they actually do something, and it probably means less strain on the treasury.

However, Yvain, give me a moment more to explain the idea behind the auto-tax. I've been in other nations (well, Novatainia) that had very good tax law designed to encourage spending etc. Like Shireroth, the idea was government money would go out for work done. And we taxed each month (or whenever I remembered). The thing was ... a lot of the bounties went unfulfilled, we stopped bothering with budgets, and the Crown just accumulated tons of cash. So we started paying the government huge salaries so some of it got back into the economy ... but that wasn't really fair.

An auto-tax, as opposed to a regular tax, means the government always has enough money to do what it needs to. It's relatively fair, so in a way it doesn't put anyone back in the Landsraad from where they were in relative positions - voting power is retained. But it also means that most of the money is in circulation and that we don't accumulate large sums in the Crown account that suddenly get paid out (eg at war) and make everyone else's money worth less. In that respect, a one-off 1000 or 2000 now means we've tweaked the "amount in circulation" to the size of our citizenry - and I'm certainly against increasing it any further unless we get a dozen more active citizens ...

[Hesam Jayatar]

- I'm against salaries for ministers (but not that committed to it if it passess anways). I believe that we should be working for bounty. I do realize that for the MiniINT and MiniTrade there is alot more work. Andreas has so much work, he had to hire me as his second. I think instead of a salary AND a budget, we should just issue a lump sum of money for ministries to do with as they like. Either for commissioned work or for pay. The downside is that we'd have to be careful to prevent misspending.

- I'm for a Duchy tax. I agree with Yvain. The economy is meant to promote work on culture. A Duchy tax allows the Nobles to maintain their autonomy and as such, differences between duchies will develop as the different nobles attempt different tax strategies.

- I am for increasing the amount of Erb in circulation. When I wrote out this system, I picked 5000 erb as an arbitrary number. We had less citizens and less activity at the time, and 5000 seemed to be a decent amount. I know Yvains concern about devaluing the erb, but there are situations where inflation can be a good thing. Remember, a currency is only valuable if people can afford it. With a small amount of controlled inflation we allow poorer citizens to have greater access to erb. How? Because if the value of the erb goes down, people will be more willing to spend, which encourages company productivity. Right now most people have around 100 erb. People are not all that willing to spend it because they're constantly concerned about increasing their power in the Landsraad. When we have businesses which become necessities (Law fees, fines, stories, graphic work) people will have to realize they cannot hoard their erb. By devaluing the erb slighty, people will be more willing to spend small amounts.


These are just my thoughts, but I think they're valid.

[Erik Mortis]

At the moment erb is just stock piling in people's accounts. We need to get it moving, before making more.

And what about when people can't pay taxes? Will there be consequences?

[Hesam Jayatar]

That's a good question. The cruel thing to do would be to revoke titles etc.. But I'm not a fan of that. We should look into better ideas.

[Erik Mortis]

To be honest, there are view penalties we could logically impose. I suppose for Dukes they can lose voting rights until they produce the funds to pay their tax. Perhaps by taxing those below them. If we just tax Dukes/Duchies this means taxes will trickle down and thus only the direct level above someone needs to deal with consequences to not paying taxes.

I mean, the Imperial Government doesn't hold much over a Baron, but his Duke might. So tax the Duke/Duchy, and the Duke can inforce taxes to help pay his/duchy taxes, and deal with those who can't/don't pay.

[Andreas the Wise]

Taxing Duchies appears to be the go. If the entire Duchy doesn't have 100 between it, I won't hold it against them (unless they deliberately sent it to another duchy and get it back soon afterwards), but if just the Duke doesn't ... we'll be getting our money, one way or another ...

[Malliki]

All duchies have 100 between them. Just check the bank summary and the votes in the Landsraad.

[Andreas the Wise]

I know ... I'm talking in the future ...

[Andreas the Wise]

Well, after paying Jacobus, the Crown Account now has only 115 . So the time really comes to seriously push tax legislation through (if we don't plant to create any more money. To maximise the chance of the bill passing, I'll put all the tax bill alone.

[Oroigawa Koreyasu]

if we don't plant to create any more money.

You know, money doesn't grow on trees, Andreas...

[Andreas the Wise]

No, it comes out of those nice machines in the royal mint ...

[Oroigawa Koreyasu]

I don't think you're noticing your typo...

[Jacobus Loki]

I plan to give most of mine away. I did 17 erb today.

Tax the Duchies. Let the Dukes raise it. Those that are heavy handed will loose cits.

[Andreas the Wise]

I don't think you're noticing your typo...

Ah .... we haven't told you about how those particular machines work, have we ...

[Hesam Jayatar]

Hurray! Our first recession!!!

So are we taxing or what?