Taxes & Private corporations

I've been rebuilding my empire on LU and I couldn't help but notice my country income from private corporations was much smaller than I expected. I had 50 private corps in my country, each making more than 3B per game month, so I expected to make about 60B per month. In fact, its contributions were around 21B.

I took a look into those corporations and found that instead of getting 40% of their income in taxes, I was getting 14%.

When did this change? That's a 65% reduction.

Also, I'm getting the sensation that countries that harbour private corporations are getting the short end of the stick on this.


Here are some numbers:

The base here is Lance of Longinus, because it is close to its natural pop limit, and Electric Power corporations because I feel like it.

Longinus can field 33 529 819 workers, 4 842 014 are housewives and 1 753 924 are disabled workers, thus 877 877 are rehabilitatable.

A state electric power employs 234 290 workers and a private one 229 315 workers. Meaning we can harbour about 104 electric state corps and 131 private electric corps.

Now, assume profits revert entirely to the country in state corps and only 14% of revenue for private. Assume that state corps have a profit of about 6B per year and that EP have a revenue of about 32B per year.

Now, how much is expected at the end of the year for the country? On the only state model, I expect 624B in profits for the country and on the only private model I expect 586,88B.


There is another thing. Besides being better to have a state model, the interests of Presidents and CEOs are rather misaligned. It is better for CEOs to run lower salaries, and it is better for them not to upgrade their effectivity, which might offset the bonus they bring when educating housewives and rehabilitating workers. A bonus, by the way, that doesn't make them attractive enough to even consider having private corporations in the first place.


Taking everything into consideration, the all private economy model with 0% taxes has become the worst model.


I request the following:

1) bring the country resources used fee up to 18-20%.
2) To compensate private corporations, these should:
i) face smaller fixed costs
ii) slower deterioration of upgrades
3) Those changes need not to balance things completely, because what matters to the CEO at the end of the day is how much his enterprise is making, so the rest of the adjust can come from a reduced enterprise tax.

I agree that the state economy is preferable. I have always preferred the reliability of it anyway. Used to be that a big argument against one was the additional amount of targets to defend. This isn't such an issue for most nowadays though.

It seems CRU has halved to me, not that long ago over a billion a month in CRU income per corp was expected. You rarely see that now. But other things have changed to compensate some I think.

Honestly LG, with all due respect, you may be suffering a bit from the 'memory of how things used to be' syndrome. The figures are much smaller now and it sure takes some getting used to, even for someone like me who has played consistently throughout the changes.

On your first point, a comparison of two companies, public and private and what they pay the host country. I picked two oil companies both fully upgraded. One owned by my CEO and one a state corp in the same country.

Public corp:
employs: 235,800
full year profit: $5789.81M

Private Corp:
employs: 228,125
full year country resource tax: $5354.77M

Now, taxes can vary but are controlled by the host country. Many CEOs advertise they want low taxes but any good large CEO understands any situation better than a C3, in which many of their corps are likely based, is one they wouldn't mind putting a few corps in.

If you assume a 30% tax rate in the above example, which would add $2281.87M in state income on the private corp, the numbers look like this.

Public Company total profits: $5789.81M
Private Corps total tax: $7636.64M

Keep in mind the total revenue of private corps is always potentially higher than a public one due the higher upgrade caps.

On your second point. I agree on a few things. CEOs don't seem to profit on efficiency upgrades and many pay low wages.

Now, on how I do business:

My CEOs: I don't pay low wages and do the efficiency upgrades anyway. I would gladly pay 30% taxes in return for a stable labor situation and effort to raise the welfare tax.

My Countries: I run the private corp model. I maintain that it is the one that is the most profitable for countries. I chase out low wage paying CEOs by creating competition for labor with additional corps paying higher wages. This forces them to adapt, move, or, when their market value drops, I nationalize their corp.

The solution to this is for Presidents to understand their value in providing steady labor and a good welfare index and charging a reasonable tax.

The all state corp method, has always been good. And in the last couple years has been better. If you are good at it, (if not, then go with private.)

It gives you much more versatility, and control over your country.

My guess, the game masters, have been trying to reduce the effects of 700+ salary, CEO control, public, only, econs. Its out dated. It made sence when every one was doing it. But you know, it just doesn't make economic sense to pay a dish washer $25/hour. And that is what the jacked up salaries amounts to.

Their seems to be a min cash level in both state and private corps, before they pay out. I've noticed a couple times reducing CEO CRU pay outs, but i haven't really investigated it closely, as i don't go with CEOs.

they say that corps are most profitable in the 300-500 range salaries. but over all, thats not true. honestly, most salaries should be in the 100-150 range. with corresponding gov salaries. you'll be better off.

seriously, if the player base was to establish lower state and gov salary levels. The country costs would also decline. by keeping the welfare up via country indexes. your corps will make allot more money. leaving room for ceo's to come in and run salary levels that will both pay well with CRU/Taxes, and still offer them more money.

C3s running 300 salary levels, CEOs running lower than 300 salaries in player countries with taxes, and high welfare, should be competitive

not exactly answering your question, just throwing this info out there. I'm sure the 700+ people will get the hint.

https://sim03.simcountry.com/cgi-bin/cgi2nova?SN_ADDRESS=wwwCountry&SN_METHOD=w3graph&miTable=cntrhist&miKey=232&miColumn=vCIncomeCorporateTax

https://sim03.simcountry.com/cgi-bin/cgi2nova?SN_ADDRESS=wwwCountry&SN_METHOD=w3graph&miTable=cntrhist&miKey=232&miColumn=vCmainIncome

https://sim03.simcountry.com/cgi-bin/cgi2nova?SN_ADDRESS=wwwCountry&SN_METHOD=w3graph&miTable=cntrhist&miKey=232&miColumn=vCmainCost

https://sim03.simcountry.com/cgi-bin/cgi2nova?SN_ADDRESS=wwwCountry&SN_METHOD=w3graph&miTable=cntrhist&miKey=232&miColumn=vCmainProfit

and for the nay sayers,

https://sim03.simcountry.com/cgi-bin/cgi2nova?SN_ADDRESS=wwwCountry&SN_METHOD=w3graph&miTable=cntrhist&miKey=232&miColumn=vCmainCash

Current FI is 227, #1 on WG

and it is low salaries, that makes it possible

o yea, your salary level also dramatically effects the cost and contribution of country supplies. that little difference, is multiplied, as you increase salaries. decreasing salaries, should allow more room for higher country quality supplies, and make up some of the difference in welfare, and production. haven't really had the chance to XP with that, but its my theory, and i'll eventually either prove it right, or figure out how to make it work.

also, i'm curious about low tech type products. like the ag and food categories.

by running lower than what we are used to education. (and saving cost,) and building more low tech stuff, the education system should be able to keep up.

it used to be that we'd all build mostly high tech stuff, and raise the salaries, as an extra income tax bonus. but with reduced income tax. and the fact that every corp type, can be profitable, going with tons of high tech corps, increases cost with less benefits. how many powerful countries in the world have ZERO agriculture? buy building a more balanced country econ system, it'll be interesting to see how SimEcon continues to develop. over all, i'm happy.

i think, not sure, but their is a hidden game feature in what i just said. i've been watching it, and it seems that certain corps reduce the countries needs for certain resources. i haven't been able to nail it down. so i may not be anything. but it'd be cool if we could convince the GM to give us some sort of "balanced econ bonus," not a self sufficiency bonus, but a bonus from producing products from every category.

which, if you think about it, would be an extra benefit to promised "country resources,"

sorry LG, didn't mean to run away with your thread. guess i just kinda had to unload that stuff, with out flaming

I have noticed some of the same Laguna, but am curious - what quality are your electric power corps producing.

This is from the documentation.

<!-Quote-!>Quote:

The percentage of revenue they pay depends on their quality level. At top quality, the revenue percentage paid to the country can reach 35% to 40%. At low quality levels, the percentage is 10% to 15%.<!-/Quote-!>

Good little study there Josias, +1

I do pay the higher 300+ salaries for corps. At max quality, especially for higher qua private corps, I would bet the extra 9% production (the difference in Josias' state and higher paying private corps) is worth the additional wages. I do agree with liking to have control, I run most of the private corps in my countries.

I lack a country the size of Josias' example. I could show that my country has more income and profit for its size but I am not sure that is a fair comparison.

My country has a population of 46m. I would be impressed if there is an example of a country with a better balance sheet in the 40-55m population range.

I've always managed all of my countries' economies, because I've always been better at it than any collection of individuals. But, back then, allowing enterprises to come and build at random was a very good alternative.

Now, when I finally decide to open my empire to foreign business, it comes as a bit of a cosmic joke that model is now the worst of them all.

If a player asks, I can not and will not tell him to invite private corporations into his country. The way things are now is much more rewarding to just build state corporations.


I couldn't help but giggle, when I saw that country resources used was down to 14%. That seems to be the UE average for a similar tax. I find that wrong on two accounts. The first is that since Social Security is incorporated into our countries' budget, unlike convention, then so should the company's contributions to social security. These should be about of 21% of wages, which should be about 1/3 of revenues, so this would bring the fee of country resources used up to 21%. The second is this is a game in the far distant future and in a far distant galaxy.


My corporations are upgraded up to 230 and the output is at 320.


The main reason I posted was so that players became aware of this: private corporations are for losers.

Be around long enough and everything goes in a circle... thanks for the update Laguna (and others).
I was just getting used to allow private corps :P