Hello,
Wow, first off, sorry for the delay on response, I only get on for a little bit everyday. Second off, what I explained in my last post is just a simplified version of how tax would be calculated. First you find out what you make, then divide it by 12 (that'll get you the average) and then that will determine your tax bracket. I hope that makes sense.
p.s. Maybe in the next game called the company their accounting terms will be up to code with the american system. =P
take care
~subhash
you're right. people would change tax brackets and pay different amounts, but that's how the real world rolls. it also would be easier on the head, instead of paying taxes 12 times a year, you just pay it once, it's easier to manage.
newbies starting out will benefit as well, because they can show up to 6m profit in one year without paying taxes (500k for 12 months) so it will actually help them expand faster.
it would be simple to figure out, one jan 1st you have 10M.
12 months later, you have 12M.
cash went up 2M.
you pay one lump sum tax, as if it were 666k a month,
2M @ 5%
100k is how much you pay =D
i get sunday off and i won't have time to talk until later on this week, but i hope that makes sense. one tax bracket per year.
take care
~subhash
oh ok, so now we are on the same page.
yes, tax brakes could change, but that isn't a bad thing. it won't lead to uncertainty because this is how things are done in reality. uncertainty is when you don't know what's coming. when you sell something to the market, there is uncertainty when it will sell, just like real life. so governments a long time ago thought of this and decided to have businesses (whose dividend reinvestments % are higher) pay taxes annually.
If we get taxed on an hourly basis, you must actually be on the computer all day to manage cashflow properly. but here's the problem with that, people can't do that, twice a day is a lot, but for those who can do it they will get the benefit.
Business owners are not workers, they should not have to pay taxes on a month to month basis. they should (and all the companies i know do) pay their taxes for the entire year. by paying it once, you increase your cashflow to buy/supply.
also, in reality, companies DO change tax brackets. one year they may only be able to get to the 15, while other years they may be able to get to the 10% bracket. So by doing this tax plan, we can get closer to creating a better game. =D
As for the second point, I haven't taken accounting for a while, but how it applies to my life. We make money, we spend money, we invest money, we live off the money. and the biggest difference between this game and life is that you don’t have a cost of living. So, all money spent is deductible. I bow to the person who thought of this game and did this, I mean that’s a neat system. But, if we want to get this game to the next level, then we definitely need to do changes to make it more realistic, like an annual tax.
DDD, I am not rebutting your second point, you make sense =D
But it is irrelevant what terms and forms they use, the net effect is the same.
Also, if we decided to make this game more financially accurate with words and all, it can be marketable to schools. Econ teachers drool when I tell them about this game, but I also tell them about the accounting flaws in it, and the fact that you don’t have personal overhead or any COL.
Take care
~subhash
wow, those are good points.
so you are saying in your first argument that there will still be tax brakes and a company can still be switching off between tax brackets, which will lead to more uncertainty, and lead to more cashflow chaos?
And on your second point, are you saying that the balance sheet does not accurately reflect how a company is doing?
~subhash
Hi, my name is subhash. I think taxes should occur once a year. This will make it better to get a fair amount of tax from the companies. This will benefit people who sell to the market and people who send offers to people. When you have no idea when your income is going to come, it is good to know you won't be taxed in a higher bracket, because in reality your profit is way less. The taxe system is meant for companies who make generally the same every month. so my idea... on the first of every month, add what you made for the year, and divide it by twelve, that will determine your tax bracket and amount you pay in taxes.
~subhash
