[0.86][Issue]Tax Rate and unrest : Why the current system is broken, and how to repair it

By on March 17, 2012 2:18:04 PM from Elemental Forums Elemental Forums

DarkGaldred

Join Date 02/2008
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The attached graph represents the unrest generated by taxation.

In the current system, the values are as follow:

 

Code: xml
  1. 1) Current unrest and taxes 
  2. Taxes         0   2    4    6    8    10  
  3. Unrest        10  26  40  52  62   90
  4. DeltaUnrest      16  14   12  10  28

 

Why is it broken? Because it makes the first taxation steps the harshest (except for the last one), when they should be the least penalizing ones.

It makes the unrest curb curved in the wrong side :

It means that if you need to collect 40 taxes (out of a 100 Gildar equivalent econmy) in 20 turns, the optimal taxation rate is to do as follow :

turns  1-15 : 0 taxes : total unrest = 15*10 = 150

turns 16-20 : 8% taxes (62% unrest) = 5*62 = 310

Total unrest = 460%

Average unrest = 23% (each turn).

 

Trying to maintain the same tax rate would have caused a greater unrest (26% average).

This does not make sense at all : the optimal way of taxing is to let the treasury go broke, and set the tax rate at the highest level before punishing, and then reset it to 0, unless you were able to find something to sell in the meantime.

If you are going broke next turn, it is better to set the tax rate at its 8% level (1 step below maximum) for a few turn before going back to 0%. 

If you are not going broke, you SHOULD NOT set taxes to any value above 0. 

 

Not only does it not make any sense, but it rewards poor planning,   It makes planning taxation completely irrelevant, as the optimal way is not to plan for anything and see wether you will be broke or not the next turn.

 

The only case in which it does not apply is when you need to set the maximum tax rate that causes huge unrest. BUt in every other situation, stupid planning is completely irrelevant.

 On top of that, it increases the micromanagement hurdle for no good reason (as you should not keep the same tax rate everytime).

For the taxation system to make sense, the tax should at least be flat. 

Code: xml
  1. 2) Minimum correction needed for a flat tax rate. 
  2. Taxes         0   2    4    6    8    10  
  3. Unrest        10  23  36  49  62   90
  4. DeltaUnrest      13  13   13  13  28

At least, trying to set a sustainable tax rate would not hamper the player in this situation. But lack of planning is not penalized in any manner, and it still would be better to let taxes to 0% as long as possible (as you still have a chance to find another way to fill the hole in the treasury, and when you are about to get broke, no big deal, you can still increase taxes), otherwise, you would be missing on a few points of production, as you cannot be certain you would not have found some way to get money before going broke.

To reward planning, we could at least put the unrest increments so that they make sense :

I think it was the initial plan, but the unrest values must have got messed up. 

 

Code: xml
  1. 3) Corrected system 
  2. Taxes         0   2    4    6    8    10  
  3. Unrest        10  20  32  46  62   90
  4. DeltaUnrest      10  12   14  16  28

 

I'd rather have increasing penalties, and lower overall taxation penalties as it is too high now (and it is one of the reasons why upgrading troops is so expensive) so that the player is not tempted to change taxes every month (each increment is 150% of the previous one), so that setting some taxes is no big deal, but the higher the tax rate, the higher the penalty : 

Code: xml
  1.  4) Corrected system  
  2.  Taxes         0   2    4    6    8    10  
  3. Unrest        10  15  23  35  53   80
  4. DeltaUnrest      5   8    12  18  27

 

Any of the last two systems would work (the last one is purely a personnal preference of mine), but the unrest = f(taxation) function needs to be changed to one of these two systems.

 

 

 

anyway, if the percentages are REALLY the value of production=>Gildar, then the unrest is totally off, as it incurs an average penalty of 6% production lost for every % of production converted into tax.  

 That is on average, for every 7 production converted to Gildar, you only get 1 production worth if gildar

 That is huge, and explains partly why you never can upgrade troops, as you'd need to waste 6 times the difference of production cost of the troops in unrest to upgrade them instead of creating them from scratch.

 Maybe the percentages are not directly production percentages, but some abstract value. In this case, my comment is unfounded, but it makes it harder to balance, when sometimes, there is an equivalence between production and gildar (upgrading troops for instance), and sometimes not.

I'd much rather have tax unrest apply only to production and not research, so that it is much easier to balance, and have the taxation waste back to a much reasonnable level (like at most 50% taxed prod lost, maybe 66% if going punitive, with the percentage of production lost increasing with taxes).

The added benefit is that we would even be able to afford building upkeep instead of almost never building anything with an upkeep cost.  

 

Code: xml
  1.  4) Rebalancing Taxation and production
  2.  Taxes         0   10    20    30    40    50  
  3. Unrest        10   15    23    35    53   80
  4. DeltaUnrest   5   8     12    18     27

After all, there is no reason why they would be less willing to pay taxes after a cataclysm, during wartime, when we routinely pay around 50% taxes in most industrialized countries without going on strike 62% of the days. 

 

Edit : 

As  I came to notice in my second post, the tax level is not a problem in itself : compared to production from population, taxation levels are on par.

That is, the current 2, 4, 6, 8, 10 tax levels already represent 20, 40, 60, 80, 100% of population related production.

The problem is that you only get tax from your population, but the unrest affects both the production generated by population AND by materials (which can be as 10 times as high, in low pop hig yield cities). That creates a discrepancy that makes Gildar and production not coherent at all.

There must be a  simple relation between production and Gildar, because otherwise, it will make upgrading troops impossible to balance (as the costs are based on production, but paid by taxation). The last part of my proposition (table 4 : rebalancing taxation and production) should be ignored, but there still is a simple fix :

 Either make taxation income depend on production from material too, at the same base ration (that is 20, 40, 60, 80, 100%), or make production from materials unaffected by unrest.

Both would make production and Gildar (and thus upgrade costs and shopkeeper prices) more coherent.

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March 17, 2012 3:36:15 PM from Elemental Forums Elemental Forums
Nice analysis. I think you're spot on that the first taxation levels shouldn't punish the player so hard. I believe quite a few players keep taxes completely off for long times because the low taxation levels are not worth it.
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March 17, 2012 5:41:03 PM from Elemental Forums Elemental Forums

Very good work. That explains why I routinely set my tax rate to 0. I agree with making the changes you suggest immediately.

A small quibble, unrelated to the point of your analysis, and possibly where Brad (I believe a libertarian by tradition) is coming from regarding the final comment that we pay 50% taxes and yet don't go on strike 62% of the time. Strikes are not the only way in which high taxes reduce productivity and the size of the economy. The first and most important effect is the 'deadweight' loss, which is the loss of productivity encountered when routinely efficient trades cannot take place due to taxation (that is, the tax burden just makes the trade slightly not worth it, when it normally would be). Some taxes have very large deadweight losses, others have none. Politicians don't seem to understand this at all, and we end up with massively inefficient economies and less wealth and productivity than we might otherwise have.

Your analysis also points to the problem that planning is not rewarded. Another 'cure' for this would be to make changes in tax penalised more for a period (people are, in general, less happy when tax rates are put up, and ignore the already existing high tax rates, which they 'get used to').

 

 

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March 17, 2012 6:34:21 PM from Elemental Forums Elemental Forums

Indeed, there are several ways in which taxation reduce productivity (bureaucracy, disincentive...).
But this particular point is moot anyway, as production and taxation are computed as follow :

 

Code: xml
  1. </p>production_from_population = population * 0.1
  2. taxation = population * taxation%


So 2% tax is already 20% of prod more or less, if we exclude production from materials.

The Gildar<-> production conversion problems (I talked about armies upgrade cost, but the price of adventuring items relative to nationwide taxes is another derived issue) don't come from the low taxation thresholds as I first suspected it, but from the fact that production from materials is not taken into consideration for taxation benefit, but is wasted by unrest nevertheless.

In other words, the benefits from taxation do not depend on material availability, but the cost does. So if you happen to have only 5/0 cities (well, I am not sure it is even possible, though), your taxation will be much more "efficient" than if you had high material cities. That is a bit weird, and not really how I think most would suppose the game works (at least, my asumption was that the tax percentage was based on the production taxed, but it is a per habitant tax). It would make more sense for tax income to be based on production, and not on population (I know it was already the case in Master of Magic, but in this game, the taxation model was way off, in the other direction, as you awalys were swimming in money, allowing you to derive all your mana from there, so it's not a very good reference, and that's coming from a big fan of Steve Barcia's work ).

The second encountered problem is NOT that taxation is too low, but that it should take production from ressources into account in order to be easier to balance (production from ressources can be ten times higher than production from taxation if you spread fast).

Reducing most building upkeep to zero, dividing item price by 10 (!), and reducing armies upgrade price, all of these will be done in the next build, I have no doubt, but they could all be addressed as a whole by making the conversion rate of production to gildar more consistent.

So my last proposal is off, and would be better replaced by taking production from materials into consideration in the taxation process, to have prices be much more consistent overall, and/or to allow production of trade goods (production to gildar direct conversion), or "upgrade vouchers" redeemable when upgrading troops. 

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March 18, 2012 9:13:25 AM from Elemental Forums Elemental Forums

I agree. 

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March 18, 2012 1:47:03 PM from Elemental Forums Elemental Forums


A comprehensive and accurate analysis.  Good one.

I'm not sure about the diagnosis, just as I'm not sure about what the developers design intentions on taxes are at this point in time (beyond that they want to keep gildar tight in the early game).   It occurs to me that there are ramifications with the unrest reduction spells/buildings which are (or should be) available in the later game.  (And my inner conspiracy theory self keeps suggesting that they want us to find all the cheese/exploits for getting around tax...guess I'm in a state of unrest?)

However looking at the computer players taxing behaviour which keeps switching from maximum production/research to maximum tax efficiency tells me that they are more than aware of the situation - it is intended.  Maybe the bump in taxation rates in 0.86 also suggests something?  I don't know.

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March 18, 2012 6:15:34 PM from Elemental Forums Elemental Forums

We can kill two birds with one stone here.  Automatically channel surplus production directly out into the field for (slower) military upgrading.

If we make army upgrades partially automatic by the production/unrest ratio slider we can reward players who go for elite equipped but significantly smaller unit armies because they will have less in a group to upgrade each time and far less overhead.  By comparison, players who race for the largest possible army compositions deployable will upgrade the slowest when out in the field.  Army units are upgraded in bundles not individuals.  Also, instant upgrades in exchange for cash is still useful and has a place in game.

As FE stands right now big numerous glass cannon units are the only optimal military strategy, this can fix that too.

 

balance considerations and suggestions

Costs can factor in the value of previous equipment being exchanged for better balancing purposes.  Can't have a tier 1 weapon jump to a tier 5 without some sort of penalty plus it benefits players who follow good pacing to maximize this route to victory.  Is there a bonus for military retrofitting within your cities or borders?  Should distance be a factor?  Should a unit trait be allowed for this?

 

 

I have no idea how to mod this in so I hope the devs read it.

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March 18, 2012 7:36:20 PM from Elemental Forums Elemental Forums

IIRC, the AI must be programmed to micromanage its tax rate, which is evidenced by the Gildar graph at the end of the game.  Player gildar is usually a smooth line, but the AI is a jagged, up and down line.  I have also checked AI town details and seen extreme changes in unrest from one turn to the next.  I think maybe Frogboy has trained the AI to take advantage of the inconsistency here.

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March 18, 2012 8:23:32 PM from Elemental Forums Elemental Forums

Quoting feelotraveller,

A comprehensive and accurate analysis.  Good one.

I'm not sure about the diagnosis, just as I'm not sure about what the developers design intentions on taxes are at this point in time (beyond that they want to keep gildar tight in the early game).   It occurs to me that there are ramifications with the unrest reduction spells/buildings which are (or should be) available in the later game.  (And my inner conspiracy theory self keeps suggesting that they want us to find all the cheese/exploits for getting around tax...guess I'm in a state of unrest?)

However looking at the computer players taxing behaviour which keeps switching from maximum production/research to maximum tax efficiency tells me that they are more than aware of the situation - it is intended.  Maybe the bump in taxation rates in 0.86 also suggests something?  I don't know.

 

It is possible it is the intended behaviour, but it is not very probable, because it would just be equivalent to removing all intermediary taxation levels as they serve no purpose under the current system : We could just have no taxation, high taxation, and oppressive taxation levels, as the intermediary levels are not really viable options. The fact that the AI uses games the system too might be because it is designed to maximize long term efficiency : it should have no trouble indentifying that the intermediary tax serve no purpose, as it probably compares the different outputs to take a decision (or it is hardcoded to go between max and no taxation, but that would be pretty weird).

 

Of course, with unrest reducing buildings, the first level might not be so bad, but then again, it will just be a trivial binary decision, and not a trade off between treasury and production efficiency.

 

On a side note, it is a bit weird not to take production (material) into account  for taxation purpose : obviously a 5% tax level on a highly productive country should earn more than on a backwater one (here, not only does it not bring more income, but it costs much more in term of lost production).

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March 18, 2012 8:36:14 PM from Elemental Forums Elemental Forums

Can't you raise the tax rate as you get more -% unrest buildings to counter it?

 

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March 18, 2012 9:35:15 PM from Elemental Forums Elemental Forums

Indeed, you can increase tax as you get more -unrest buildings, but it won't fundamentally change the problem : it will usually only make the first tax level as good as zero tax, and you'd be juggling between this one, and full tax (not oppressive). The intermediary levels still won't serve much purpose. It will get a bit trickier with many cities having different -unrest buildings, as there could be some point in chosing an intermediary level, but there are much less situations in which it is a non trivial binary decision with the current system.

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March 19, 2012 1:32:52 AM from Elemental Forums Elemental Forums

Great analysis,

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March 19, 2012 11:17:49 AM from Elemental Forums Elemental Forums

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March 19, 2012 6:53:30 PM from Elemental Forums Elemental Forums

I dislike.  I think the current configuration accurately displays a society's immediate shock when moving from 0% taxes to being taxed.

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March 19, 2012 8:38:23 PM from Elemental Forums Elemental Forums

It does not work this way : it just make the tax levels between 0 and very high useless, as they provide no benefit. So they could as well not be there, and we'd have 3 taxation levels : no tax, lots of taxes, and really way too much taxes (oppressive). If it were an accurate representation, no one would ever bother with proposing tax cuts, except to set taxes to zero when the county is not going broke in the following season. In any economic course, you'd learn that the marginal benefit of taxations goes down as taxes increase, because more and more people stop seeing working this extra mile as worth it (and as Galactic Hunter pointed out, less and less trades are made profitable).

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March 19, 2012 9:49:08 PM from Elemental Forums Elemental Forums

Quoting DexCisco,
IIRC, the AI must be programmed to micromanage its tax rate, which is evidenced by the Gildar graph at the end of the game.  Player gildar is usually a smooth line, but the AI is a jagged, up and down line.  I have also checked AI town details and seen extreme changes in unrest from one turn to the next.  I think maybe Frogboy has trained the AI to take advantage of the inconsistency here.

Shhhh! Don't make my goons come over there.   

 

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March 19, 2012 10:18:15 PM from Elemental Forums Elemental Forums

I'll say this about the Tax Rates.  I pretty much do NOT build any buildings that require any maintenance.  That's the only way I've found I can afford an army to defend my homeland and bring the word of Gaia to those unwashed Empire masses with the loving strokes of my sword.

Actually, that's slight a lie.  I do build some Unit upgrade buildings in one of my cities for producing my holy warriors.  The rest build only maintenance-free, growth buildings.

And I agree with the OP that the Tax Rate/Unrest curve is backwards.  Low tax levels should produce relatively small increased in unrest.  Once you get past normal, the unrest should spike dramatically.

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March 21, 2012 2:10:18 PM from Elemental Forums Elemental Forums

Quoting Frogboy,
Shhhh! Don't make my goons come over there.

Aha!  J'accuse!

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March 21, 2012 8:43:15 PM from Elemental Forums Elemental Forums

Quoting Aerion Istari,
I'll say this about the Tax Rates.  I pretty much do NOT build any buildings that require any maintenance.  That's the only way I've found I can afford an army to defend my homeland and bring the word of Gaia to those unwashed Empire masses with the loving strokes of my sword.

Actually, that's slight a lie.  I do build some Unit upgrade buildings in one of my cities for producing my holy warriors.  The rest build only maintenance-free, growth buildings.

And I agree with the OP that the Tax Rate/Unrest curve is backwards.  Low tax levels should produce relatively small increased in unrest.  Once you get past normal, the unrest should spike dramatically.

I'm exactly the same with the exception that I lighten up and start building some research oriented buildings in the bigger towns/cities once I have things like Farmer's Markets to solve the worst of my economic problems.

And of course the troop production city (there can be only one!) gets anything and everything that improves the quality or speed of troop production.

I don't think this is a particularly good situation though and I hope they are going to make more viable building options for non military cities, particularly in the early game.

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March 22, 2012 2:21:46 PM from Elemental Forums Elemental Forums

Quoting Aerion Istari,
I'll say this about the Tax Rates.  I pretty much do NOT build any buildings that require any maintenance.  That's the only way I've found I can afford an army to defend my homeland and bring the word of Gaia to those unwashed Empire masses with the loving strokes of my sword.

Actually, that's slight a lie.  I do build some Unit upgrade buildings in one of my cities for producing my holy warriors.  The rest build only maintenance-free, growth buildings.

And I agree with the OP that the Tax Rate/Unrest curve is backwards.  Low tax levels should produce relatively small increased in unrest.  Once you get past normal, the unrest should spike dramatically.

Hey wait, army.... Thats the 3-5 heroes walking together rights?... or meaby the bunch of pioneers building stuff... Im not sure I know what kind of army I want to build unless I upgrade warfare exponentially, which kind of bugs me really... - But thats totally besides to Original Post.

I saw this post and tried to run a game using the "no tax / high tax" tactic. And that feels artificial, and sad. Really hope the devs listen to this post as it is thoroughly researched and u even put in graphs!! ... Excellent work!!! Though it was abit long .

Personally I will still run low taxes just because the game feels artificial and silly if I have to micromanage taxes like that, and the tax system/research penalty makes the lvl 2 city upgrade that provides 2 gildar per turn my favourite, cause less research is bad .

Sincerely
~ Kongdej

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March 23, 2012 12:49:03 AM from Elemental Forums Elemental Forums

I agree with Reply #3, and I think it would be well worth implementing.

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March 24, 2012 7:41:00 PM from Elemental Forums Elemental Forums

These seem like some sensible sugestions - it would be nice to be able to make some decent cash out of taxes.

 

An extra note - just comparing taxes to production is a mistake - unrest also messes with ones research too.

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March 25, 2012 5:41:07 AM from Elemental Forums Elemental Forums

Quoting ben_sphynx,
These seem like some sensible sugestions - it would be nice to be able to make some decent cash out of taxes.

 

An extra note - just comparing taxes to production is a mistake - unrest also messes with ones research too.

It is indeed, but research is already based on population,  as is tax income, so the amount you get is more or less proportional to the research amount lost (except with research enhancing buildings).

 

But you are right, it would be better to have tax being proportionnal to production + research, or unrest only affect production from population (and not production from material or research). 

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