Economy Adjustment: Sales Tax

[Rol_Khavos]

The newly implemented system does not address the core of the economic issue, that of the very high prices on the GTN that drives the economy into inflation feedback.  The sellers simply have to add the cost of the exchange to the price they were already charging, which means prices continue to climb higher in a feedback loop as the prices increase, increasing the need to add more to the price and harming those who have been generous in the game by gifting to others for no credits returned to them from the action.

 

Rather, replace the current tax system which is based on set values independent of the asking price to one based on what the seller is asking for.  The larger the price asked, the more the tax, with the desired sell price that BW wants an item to go for factoring in the price+percentage tax.  This would encourage a downwards trajectory on market prices and no penalize those who seek no profit in aiding others.

 

 

[GregoriusV]

not sure if i understand what you mean

are you saying that the higher the price is the higher the taxes should be?

or you take a item, have a base price to that item and tax the amount that is asked above said price?

I believe the second option seems the most fair, you pay taxes on the profit you make, therefore when people undersell, or give away you do not pay tax. Targeting only those would ask ridiculous high prices. 

The only problem i see with that is every item needs to have a base value, that base value needs to change with supply and demand, otherwise you'll end up with a super rare item, that cost next to nothing because no price changes were made, this is an absurd amount of work, needs constant montoring and as a reslut of that not really cost effective. the second problem is when you tax profit, people will inevatible up the asking price to get to the original profit margin. And what the taxation toward the buyer. irl if you buy you pay taxes. that needs to be a set number aswell....

Don't get my wrong, i also would like to have a balanced economy, as i remember the days when paying 50 mil was ludacris... but without a proper monitoring system there is little to no hope that this will change

[ceryxp]

3 hours ago, Rol_Khavos said:

Rather, replace the current tax system which is based on set values independent of the asking price to one based on what the seller is asking for.

That is exactly what they are planning with a complete GTN overhaul.  The taxation of direct trades and mail as it is currently is a stopgap measure until the complete overhaul.  The problem is that their stopgap is bollocks.  They want to encourage the GTN to be the primary means of trade in the game, but with the current taxation of trade and mail they have effectively destroyed bartering, philanthropy, and sharing amongst friends / guildies.

On 5/1/2023 at 10:44 AM, JoeStramaglia said:

We’re actively exploring a complete overhaul of our Galactic Trade Network system! This will include a lot of things I cannot talk about yet as they will come after 7.3 but am very excited to reveal soon. Make sure you check out our livestream on May 3rd at 1pm CT / 6pm UTC and follow here on the forums for more information as we get closer.

When this overhaul happens we’re going to be converting the GTN Commission Fee to a Progressive Tax starting lower than our current fees but reaching a higher threshold than our current fees. The exact numbers will be released at a later time, but the Transaction Fees implemented in Secure Trade, Mail, and COD are a flat tax meant to mirror the highest bracket in the GTN to encourage using the network. Whenever Taxes are updated in the GTN those changes will be applied accordingly here as well.

There should not be a tax applied on trades or mail that do not include credits.  Yes, people are using goods as de facto currencies.  That is a symptom of inflation and the devaluation of credits, but that bartering does not increase inflation.  Making the tax on credits in trade and mail higher than the GTN would encourage people to sell on the GTN.  Raising the GTN limit would eliminate direct trade as a necessity for many items.  The argument that people will just bake in the tax with the cost is irrelevant because that is what many traders have been doing for years, irrespective of inflation.

Their current system relies upon them (BW) accurately accessing the value of items and responding quickly enough when those values change in order to adjust the tax calculated upon their valuation.  I have no confidence in their ability to do this on an ongoing basis until they finally get around to their GTN overhaul.

[Char_Ell]

3 hours ago, Rol_Khavos said:

Rather, replace the current tax system which is based on set values independent of the asking price to one based on what the seller is asking for.  The larger the price asked, the more the tax, with the desired sell price that BW wants an item to go for factoring in the price+percentage tax.  This would encourage a downwards trajectory on market prices and no penalize those who seek no profit in aiding others.

In other words you want player-to-player trades and in-game mail COD sales to use same taxation system as the GTN?

[Rol_Khavos]

8 hours ago, GregoriusV said:

not sure if i understand what you mean

are you saying that the higher the price is the higher the taxes should be?

or you take a item, have a base price to that item and tax the amount that is asked above said price?

I believe the second option seems the most fair, you pay taxes on the profit you make, therefore when people undersell, or give away you do not pay tax. Targeting only those would ask ridiculous high prices. 

The only problem i see with that is every item needs to have a base value, that base value needs to change with supply and demand, otherwise you'll end up with a super rare item, that cost next to nothing because no price changes were made, this is an absurd amount of work, needs constant montoring and as a reslut of that not really cost effective. the second problem is when you tax profit, people will inevatible up the asking price to get to the original profit margin. And what the taxation toward the buyer. irl if you buy you pay taxes. that needs to be a set number aswell....

Don't get my wrong, i also would like to have a balanced economy, as i remember the days when paying 50 mil was ludacris... but without a proper monitoring system there is little to no hope that this will change

 

Well, with the current system, every item already has been assigned a base value, which is where the tax on items has been noted as so extreme relative to the GTN.  The tax on items is not following the going average on the GTN, but a preset value determined by BW, which is why the transaction tax can be 40%+ of the value of the item on the GTN.  So, the work has already been done.

 

No, what I was suggesting is that in peer-to-peer exchanges, those not set as a market item but direct trade/sale, the tax added to the sale would be a percentage of the price the seller is asking.  A person who wants to sell a dye module for 50 million to someone nearby might have to pay 5 million to complete the transaction, making their actual profits only 45 million, while a person selling that same dye module for 10 million would only pay 1 million.  A person who gave the module away for no gain on their part would not be assessed any tax, because they are not gaining anything in the transaction (indeed, they are losing the entire amount they may have paid into the economy to acquire the item in the first place).  Thus, the more someone inflates the price, the more they lose in the sales tax, while those who seek a smaller amount lose less to initiate the transaction.  This incentivizes lower prices while also still allowing philanthropy.

 

The option that the tax be assigned based on how much farther above the set value of the item (the direct profits) the seller is asking also has merit, but that would also make lowering the price below that value not incentivized.

 

The point is to put in downwards pressure on prices while not penalizing those who want to be generous.  The current system does not do this, and pushes people to sell for as high a price they can get by selling to everyone on the open market at super-inflated prices to recoup the massive loss of the transaction tax while completely nullifying the ability of those who wish to sell at a very low price or even no price to those they want to help in the game.

 

 

[CharrakJanor]

On 6/22/2023 at 9:47 AM, ceryxp said:

That is exactly what they are planning with a complete GTN overhaul.  The taxation of direct trades and mail as it is currently is a stopgap measure until the complete overhaul.  The problem is that their stopgap is bollocks.  They want to encourage the GTN to be the primary means of trade in the game, but with the current taxation of trade and mail they have effectively destroyed bartering, philanthropy, and sharing amongst friends / guildies.

There should not be a tax applied on trades or mail that do not include credits.  Yes, people are using goods as de facto currencies.  That is a symptom of inflation and the devaluation of credits, but that bartering does not increase inflation.  Making the tax on credits in trade and mail higher than the GTN would encourage people to sell on the GTN.  Raising the GTN limit would eliminate direct trade as a necessity for many items.  The argument that people will just bake in the tax with the cost is irrelevant because that is what many traders have been doing for years, irrespective of inflation.

Their current system relies upon them (BW) accurately accessing the value of items and responding quickly enough when those values change in order to adjust the tax calculated upon their valuation.  I have no confidence in their ability to do this on an ongoing basis until they finally get around to their GTN overhaul.

So what you are saying is that I should price gouge people as much as possible before the overhaul takes place. Seems this is what is happening irl right now.

[sundancebill]

Surprised there aren't carbon taxes.

[SteveTheCynic]

On 6/22/2023 at 1:12 PM, Rol_Khavos said:

the core of the economic issue, that of the very high prices on the GTN that drives the economy into inflation feedback.

You have that backwards.  The high prices are the *result* of the inflation feedback, not its source.  The source is the strong imbalance between the credits we can acquire from playing the game (combined with a few credit-sploits(1) of varying epicness) and the things we can spend credits on.

I can even make a case that the lack of things to spend credits on is, in part (but not in whole), *our* fault, as the players that complained endlessly about having to spend credits on X or Y or Z.  (Ability training fees after the release of 3.0, fees to pull modifications and augments (repeatedly), fees to repair gear (repeatedly), and so on.)

Yes, the way those complaints were *handled* was BioWare's fault, but the complaints were our fault.

(1) Chairs you could buy from a vendor for one credit and sell back to the vendor for 99 credits; a specific Cartel Market item you could claim from Collections and deconstruct (reverse engineer at the time) for materials and then sell the materials.