In real life, higher tax rates does not mean higher tax revenue.  In reality, when you raise taxes, people work harder to hide their money and get special treatment, and consequently, you make the same or less money.  Don’t believe me? Check out the collateral. Although it isn’t modeled in the game, above 33% and people start to hide their money. And what is the current Income Tax at? Check and you will see it is 31%.  Unfortunately, the income tax only accounts for half our income, so we need to cut, cut, cut.

 

In any case, today we are making a Libertarian government in which we cut spending and only provide what cannot be provided privately.

 

  1. Let’s look at our biggest costs
  2. Military spending is easy to cut but will lose us the Patriot and State Employee votes.  Let’s bite the bullet and bring it to min. Remember that the implementation delay will be 8 turns, half our game
  3. Let’s bite another bullet and kill State Pensions
  4. We will be replacing regular public education with School Vouchers, which is basically money the government gives you to go to a private school.  Kill State Schools and put School Voucher to max
  5. Reshuffle Cabinet
  6. Kill the State Health Service for the ridicules cost of 60 PC
  7. Replace it with Healthcare Vouchers
  8. We are at the point that ⅓ of our income is surplus, so lower taxes so you have an extra 75 billion dollars.
  9. Since we want to keep this country alive, and police isn’t actually that expensive let’s fix Law and Order.  Police, Armed Police, Intelligence Services to max
  10. Continue cutting unnecessary policies until the only thing the government does is provide a place in which you can do whatever you want if you aren’t infringing upon the rights of other.   Don’t bother with Road Building, it won’t take effect until the game is over.

 

As you may have seen at the beginning of the game, cutting spending is very difficult to do, much harder than giving out money.  Unfortunately, cutting spending breaks the game. In real life, if the government stopped providing free education, but also cut taxes an equal amount to the cost of the education, people would use the extra money to then go and buy an education. In Democracy 3, they just pocket the extra money and walk away.

The other implication of this game is that a politician cannot really cut spending if he ever wishes to be reelected.  Between this and our last session, we can see that the path of least resistance for a politician is deeper into the debt spiral.  They can’t effectively raise taxes, nor can they lower spending without a monumental effort.

 

Here is the full rundown of what happened:

 

Since people pocketed the extra money we gave them our education got slightly lower which then meant that Skills Shortages didn’t end before it did real damage like it was supposed to, so it crashed our economy so unemployment rocketed so poverty increased so crime increased and health decreased.

 

Lower Taxes, Higher Revenue