Taxation - especially trickle down economics

[longshotx]

In the tutorial, it talks to grow the economy you need to tax. I am curious if trickle down economics is also modeled - how lowering taxes put more money in entrepreneurs hands to build things, and in consumers to buy things in order to grow the economy. Additionally is inflation modeled? This article explains both tax theories better - https://www.investopedia.com/financial-edge/1211/how-taxes-affect-the-economy.aspx

[RandyNewman]

Lol investopedia

That's uh, what the "investment pool" is supposed to be

[Dark Sun Gwyndolin]

In general, having higher overall taxes is good, but you should pursue it through tax reform rather than just bumping up the tax band. Having more money allows you to invest more in infrastructure and industry, which provides jobs and thus increases everyone's wealth.

[Supply Slut]

More money to pops means more potential investment pool transfer (to pay for a larger share of construction costs).

It’s more efficient to just tax higher and spend the additional revenue into the economy. Which is just like real life - “trickle-down”, formerly “horse and sparrow” has been a popular theory for over a hundred years, but data does not support it increasing economic growth.

[Caronte☭]

Originally posted by Supply Slut:

More money to pops means more potential investment pool transfer (to pay for a larger share of construction costs).

It’s more efficient to just tax higher and spend the additional revenue into the economy. Which is just like real life - “trickle-down”, formerly “horse and sparrow” has been a popular theory for over a hundred years, but data does not support it increasing economic growth.

Which data? literally the US went through the great deppresion thanks to trickle down economics, taxing more and having a lot of public projects in order to redistribute the wealth and make the market move, the goverment literally carved up a mountain in order to give public jobs

[Zorelnam]

there are no private capitalists in the game
"All within the state, nothing outside the state, nothing against the state"
i wonder if paradox even realizes what they've done

[RandyNewman]

Dude's right, you shouldn't even be able to reform government or propose laws and ♥♥♥♥

There shouldn't even be a map, all you should see is a desk with some forms sitting on it.

Occasionally someone pops in your office to tell you one of the capitalist pops built something *all by himself*, and then everyone starts clapping for five minutes, and the entire country forms a line to take turns sucking the capitalist pop's ♥♥♥♥.

All the other Pops just sort of... exist... Like they all do now in the game; but the capitalist pops HAVE to be super-special and have their own rules. Anything less than that is Fascinism, and you should all feel very afraid and uncomfortable rn

[equinox1911]

Are there still people that think trickle down works or is an actual thing?

As far as the game is concerned it works as follows:
Pops earn based on their occupation and how profitable the industry is.
There is more to it like wage preassure but eh.
Based on pop wealth (SoL is just an average of individual pop wealth) they spend on different need categories. If they have excess of money after they accumulate more wealth over time or loose it.
For example starting at wealth 15 pops dont buy normal clothing and furniture and favor the luxery variants. Iirc at 20 they dont need/want/buy any basic versions anymore.
This leads in the long run to those industries being hard put to make a profit since no one buys the crappy stuff if the SoL is high enough. Mechanical this is due to the fixed production ratios but you can, if you are so inclined read into it trickly down not working like in reality :)

[Supply Slut]

Originally posted by Caronte☭:

Originally posted by Supply Slut:

More money to pops means more potential investment pool transfer (to pay for a larger share of construction costs).

It’s more efficient to just tax higher and spend the additional revenue into the economy. Which is just like real life - “trickle-down”, formerly “horse and sparrow” has been a popular theory for over a hundred years, but data does not support it increasing economic growth.

Which data? literally the US went through the great deppresion thanks to trickle down economics, taxing more and having a lot of public projects in order to redistribute the wealth and make the market move, the goverment literally carved up a mountain in order to give public jobs

Perhaps you should reread my comment.

[Zero, Dark Knight]

Originally posted by Zorelnam:

there are no private capitalists in the game
"All within the state, nothing outside the state, nothing against the state"
i wonder if paradox even realizes what they've done

no, no they don't - also trickle down economics never worked.
There's always a "Pull" upwards for money.

[Velesianus]

Originally posted by equinox1911:

Are there still people that think trickle down works or is an actual thing?

Unfortunately, yes.

It's wonky version of the whole supply-side taxation argument had already fallen out of favor among economists, at least of the academic variety, by the time it was being pushed by the Reagan and Bush the Elder administrations.

At this point trying to argue the merits of trickle down economics would be like claiming that the "jury is still out" on the validity of the Piltdown Man.

Originally posted by longshotx:

I am curious if trickle down economics is also modeled - how lowering taxes put more money in entrepreneurs hands to build things, and in consumers to buy things in order to grow the economy

TL;DR That's not how it works in reality, so no, it's not modeled that way in Victoria 3.

[kgkong]

Trickledown economics never was properly introduced until Regan in the 80s anyways, and that's done nothing but cause a giant leap in inflation. Trickledown economics is more "trickle wealth upwards". There's so many new bureaucratic red tape middle management in every place that you have to keep taking a slice off each exchange money and goods in order to just pay for the bureaucratic employees that are now employed to enforce and regulate the trickle down economics.

[RandyNewman]

Originally posted by KingGorillaKong:

Trickledown economics never was properly introduced until Regan in the 80s anyways, and that's done nothing but cause a giant leap in inflation. Trickledown economics is more "trickle wealth upwards". There's so many new bureaucratic red tape middle management in every place that you have to keep taking a slice off each exchange money and goods in order to just pay for the bureaucratic employees that are now employed to enforce and regulate the trickle down economics.

The narrative I've read borrowed Marx's term "the withering of the State", except in this case, they were referring to the deregulation and privatization that took off in the 80s (arguably it started in the 70s, just not with a national leader's official support) and continued through the 90s; not just in the USA and the West, but in the Eastern Block where all the State industries were privatized.

The author coined the term "Market Stalinism" to describe what rose next: a ridiculous amount of corporate bureaucracy and self-imposed terms/procedures that larger companies often created themselves, though sometimes still with a legal mandate at the foundation. With many state regulatory agencies hollowed out and downsized, companies essentially created their own. That's why I have to sign a contract to post on game forums. While meanwhile, it took months for my friend to hear back from the State's unemployment office when he was laid off during the Covid Pandemic.

None of this has anything to do with Victoria 3.

[kgkong]

The narrative I've read borrowed Marx's term "the withering of the State", except in this case, they were referring to the deregulation and privatization that took off in the 80s (arguably it started in the 70s, just not with a national leader's official support) and continued through the 90s; not just in the USA and the West, but in the Eastern Block where all the State industries were privatized.

Yea, Regan and others did start working on ideas and concepts prior to the 80s. You seen early proof of concepts introduced in small scale through the late 60s and the 70s. Usually industry and resource specific, which sparked the actual first big inflation, which didn't hit regular consumer goods until a decade or so later with the full introduction of "trickle down".

Wouldn't really wanna see this economic system implement in Vic3 anyways. It borrows on concepts that were employed in various states through the Victorian era, but the actual concept of any trickle down was mostly irrelevant and non-existent to the time period.

[lubed_assassin]

Most large companies have the bureaucracy because that's what they told the government they do in their policies. They are self-made but not self imposed.

JFK also pushed trickle down long before Reagan, he just got shot so that was that.

The biggest hurdle to any coherent economic system is the minimum and maximum prices in the game and its built on the original game. The game limits the price of the shortage of goods and then limits the price of abundant goods.

To put it in a way all the Victorian-commicrats would understand, the game itself steals the "surplus labor" by selling it below market value.