The Imperial Dominion of the South's Legislature

[Adam Griffin]

Is our income tax currently flat?

     No, but it is pretty close to flat. The top bracket of 6% occurs at $7,000 for single filers and $10,000 for joint returns.

This sounds very similar to Georgia's income tax code. I know much is carried over from OCGA; is this the case? Just for reference, Georgia's current income tax brackets were established approximately 100 years ago and have never been updated to account for inflation since.

     Yes, we do use Georgia's tax code. The brackets make more sense in that light.

I misspoke slightly before. It was established in 1929. Just another bit of information for reference; what the tax brackets would look like if adjusted for inflation.

Income Tax Rates Adjusted for Inflation, 1929-2013:

1%: <$9,730; <$12,973
2%: $9,731-$22,191; $12,974-$38,921
3%: $22,192-$48,652; $38,922-$64,869
4%: $48,653-$68,112; $64,870-$90,816
5%: $68,113-$90,817; $90,817-$129,739
6%: >$90,817; $129,739

[Zanas]

Our income tax system is clearly hugely outdated and underdimensioned. However, making it harsher would perhaps not be very well understood by our citizens in a period of economical crisis. On the other hand, decreasing it again would be foolish in my opinion : it would be no different from abolishing it completely. No one can seriously affirm that our income tax is too high.

One man once said : Ask not what the government can do for you, but what you can do for your government. Several other men went after that and scrapped many things that the government did, whereas the people always worked, gave their blood in battle, consumed, for the country and the region to be peaceful and flourishing.

So I think it's time the government went back to doing something more for the people. Since we have 12 billion dollars left, we should return it to the people in some way, not in cash, but in services. May I ask what's under the "Protection" chapter of our spendings ? Here are a few topics on which it would be dear to my heart, and benefic for the people, that we spent those 12 billion : education, R&D on environment protection and energetic transition, protection of the ill and the disabled, maybe even overseas development aid in the Caribbean or Central America, whence a number of our citizens come.

[Dereich]

Hmm...adjusting our income tax for inflation could be a sensible way to use our surplus, if we could calculate out the cost. Anyone know how we'd go about that?

[Donerail]

Our income tax system is clearly hugely outdated and underdimensioned. However, making it harsher would perhaps not be very well understood by our citizens in a period of economical crisis. On the other hand, decreasing it again would be foolish in my opinion : it would be no different from abolishing it completely. No one can seriously affirm that our income tax is too high.

To the contrary, for many of our citizens our income tax is far too high. Ergo, what Griffin said.

[Fmr. Pres. Duke]

Our corporate tax is higher than other regions. If we want to encourage job growth and companies to relocate to the south, we must cut those. Even if we do nothing else, we must get that done.

[Adam Griffin]

The current tax system was initially designed to be a form of progressive taxation, but certainly isn't as of now. Virtually everyone pays 6% - a flat tax - which is totally regressive and antithetical to my values. Likewise, conservatives have the chance to lower taxes on many individuals by adjusting these brackets for inflation.

However, I'd favor seeing a doubling of the rates if such action were taken (2%, 4%, 6%, 8%, 10%, 12%) in order to prevent a hemorrhaging of revenue. I'm just a plain ol' prole, though.

[Dereich]

The current tax system was initially designed to be a form of progressive taxation, but certainly isn't as of now. Virtually everyone pays 6% - a flat tax - which is totally regressive and antithetical to my values. Likewise, conservatives have the chance to lower taxes on many individuals by adjusting these brackets for inflation.

However, I'd favor seeing a doubling of the rates if such action were taken (2%, 4%, 6%, 8%, 10%, 12%) in order to prevent a hemorrhaging of revenue. I'm just a plain ol' prole, though.

I don't know if something so drastic is needed at this time...we need to get a cost analysis on this. Anyway, I agree with Duke that corporate tax reduction should be top priority.

[Bacon King]

It's really pointless to have a progressive income tax when the top bracket is only ten thousand dollars; we should modify it so the brackets are actually meaningful or just make it flat. As it is, we're basically just requiring an unnecessary extra bit of math on people's tax forms for no reason.

[Associate Justice PiT]

Our income tax system is clearly hugely outdated and underdimensioned. However, making it harsher would perhaps not be very well understood by our citizens in a period of economical crisis. On the other hand, decreasing it again would be foolish in my opinion : it would be no different from abolishing it completely. No one can seriously affirm that our income tax is too high.

To the contrary, for many of our citizens our income tax is far too high. Ergo, what Griffin said.

     I would mention that the federal tax rates are already pretty high, so we really should not be raising our own taxes. I could be favorable to keeping the same brackets and raising the cutoffs, to where revenue would be commensurate with that of a 5% flat tax, per my earlier calculations.

[Zanas]

You will note that I proposed earlier not to raise the taxes. I'll stick with it. But we could dispatch them differently to have a more progressive system.

I'm still a bit unsure how our income tax (individual and corporate) works. What exactly does that mean :

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Is 5.8% the arithmetic mean of our taxe rate ?

We could keep the same arithmetic mean, but have more progressive brackets and thresholds. Do we even have a GM that we could ask for a report on that ? Or some of our Legislators or citizens could work something ? I'll try my best, but I'm afraid I don't have a full grasp on how things exactly work.

Anyway, I see that my proposal of expanding a few more services is not exactly in the air right now. I appreciate that.

I have another proposal. I don't think we ought to just reduce our corporate tax for free, even if we have a higher one than other regions. I think we should be a bit wiser about it. We can hand out a few tax reductions to companies, if they engage in something progressive. That's more my spirit.

I would offer something like handing tax credits to companies that commit to laying off no worker while making profit. Every year, if they respect that, we reduce their tax a bit. If they don't abide, they have to refund with a penalty. We need to show our companies that while we are willing to be supportive of them, we also have to protect our citizens and workers from the social insecurity that unemployment represents.

We could make a similar tax credit package with a commitment to reduce their overall pollution or carbon gas emissions by xx% in the next 10 or so years. The exact details I haven't worked out yet. If they respect their commitment, they get their tax credit. If they don't respect it, notwithstanding a provable case of force majeure, they refund it with penalty.

We have to responsibilize our companies towards a better future for all our citizens.

[Fmr. Pres. Duke]

I already wrote a bill that gives tax breaks to companies who invest in green technology at the federal level.

I don't mind the worker provision, but I tend to shy away from regulations that tie a business owners hands like that. I see a scenario where you could be making a slim profit but have too many workers. Maybe if we were to consider that, set it to profit margin. Having an overall margin of 1% is far different than 30%. I still think we need to cut the taxes regardless or companies will simply go to another region and we lose out on those tax dollars regardless.

And even then, they'd chose to go to other regions. No company wants to be told they can or cannot lay off a worker. I do strongly oppose at will employment. Every company needs to give a reason for the layoff, but as long as its justifiable it should be allowed. I think it's way too much for the government to say you can't layoff a worker period if you're making a profit. Things happen. Companies restructure, change management teams, move in new directions. Even in successful periods. Simply saying they can't lay anyone off or they'll get hit with a tax is a bit much and would do may more harm to our regional economy than good. The only way this works is at the federal level. It puts us at a huge disadvantage otherwise.

I would be willing to discuss expansions of services if you pinpointed what you would like to see done. But we can cut corporate taxes along with service expansions given the surplus we have at the moment.

[Dereich]

I could see a scenario where profits are lower then expected causing layoff with the removal of the tax causing more layoffs and a vicious cycle of layoffs. Anyway, while I agree that incentives are a good idea, maybe we should focus on bringing in new jobs?

We could, (If we're not already, I have a hard time finding whether we do or not) offer business tax incentives to bring new jobs to the IDS. We can even tool those incentives towards higher wage jobs or jobs that fulfill certain standards, like Georgia does: http://www.georgia.org/SiteCollectionDocuments/Business/Taxation/Business_Incentives_Brochure.pdf

We could also offer infrastructure improvements to the areas where businesses want to relocate, like Florida does with its "road fund" http://www.flgov.com/financial-incentives/

Either way, a general reduction in corporate tax rate is a good idea. 

[Zanas]

Yeah I get what you're saying. I just still have a hard time thinking in both federal and regional paradigms. I don't always have in mind that we have laws on the federal level that either contradict or even already do what I consider for the region. I'm not thinking in terms of regional competition either.

I'm not saying companies shouldn't lay off anyone, but they shouldn't lay off anyone for economic reasons if they are making profit. Granted, we could make that a 5% profit margin threshold. How can companies lay off workers if they are profitable and hand out dividends to their shareholders ? But, ok I'm the only Labor MP here, so I'm anticipating things a bit. There could be no penalty, which would mean that they get a tax credit if they "behave well", and only return to the normal rate if they "misbehave". That way it's only incentive and no slap on the wrist. What do you think ?

How is your bill for companies investing in green energy doing ? Is it looking good ? Cause if it's not, we could at least try to implement such a thing here ?

But just flat out reducing the corporate tax, without any compensation, I'm not sure that sends out a good message to your beloved People... Don't you think ? Don't you think we could ask for just a little bit of corporate responsibility in exchange for a little bit of tax reduction ? There are a number of other ways to do that :
- incentive for hiring under 26-year-old
- incentive for hiring at least 6% of officially disabled workers
- incentive for setting up company or inter-company day childcare or crèches
.....

As for expanding services, I just thought of something : we have an upcoming bill in the docket that intends to render all government buildings in the South zero-energy. I figure we would need some cash to do so, so maybe we could count on this surplus for this, hmmm ? Well of course, we may not vote this bill, but who could vote against it, since I was the one introducing it and everybody loves me ?

[Fmr. Pres. Duke]

How can we quantify what "behaving well" means though? That is so broad. Many could argue layoffs are simply in the normal course of business. I get what you are saying though. Perhaps to protect the worker, we can look at reforming labor laws, eliminating the "at will" employment many places employ which allows employers to fire an employee for no reason. I think we need to be mindful otherwise that layoffs are sometimes necessary, and I urge caution when we try to make laws forbidding things like that.

As for my green energy bill, I have no idea. It get a 1-5% credit, I think, to companies who invested in green technology, and since it was at the federal level, it is at work in the whole country. I also wanted a cap and trade system, but that was voted down. I can't win them all.

I do think The People will approve of lowering the corporate tax rate to a reasonable level. Many of our citizens work in these companies and others need jobs. Lowering our corporate rate will encourage companies to do business in this region which will in turn create jobs for The People. Companies will be much more open to hiring new Labor if they are not under a heavy tax burden, and right now, our corporate tax is heavy relative to other regions.

Now, if you want, we can compromise, perhaps cut the rate and then maybe give more incentives to be able to take advantage of even more deductions if a company does something like hiring a disabled worker or setting up childcare, etc.

From a business perspective though, we have to make these incentives worth their time. Building daycares may cost more than the tax deductions, so they won't bother. I would favor disabled workers more than daycare.

And yes, I do think investing some of that money into the region itself is a good idea. I still favor a cut in our corporate rates though that will not put a huge dent in our revenue numbers if we lower it to 3.5%.

[Zanas]

Well, I have a feeling we are working our way to something, Mr Future VP

3.5%, if it is today at 5.8% (is that it ?), is nearly halving it, and it is too much for me to vote it. I'd say we settle for 4%, which is almost cut by a third, which is already quite an endeavor from our Regional finances. We make this commitment to get jobs here for our People. Even if other Regions still have a lower rate, what will we do if they lower it again ? Where will that stop ? And also, we can on other levels to be attractive to investment, mostly on education and innovation.

I say we keep the idea on giving incentive for the hiring of disabled people.

I will keep our discussion about "at will" employment and laying off for later, because I know of foreign countries where it is always an obligation for all companies to give a real and serious reason for laying off a worker.

So what form should these changes take ? Another bill ? Or just stuff this into the Budget being discussed right now ?

[Fmr. Pres. Duke]

Do we know the tax rates for other regions? I am curious. I am looking at this in a macro-oriented manner and considering competition with other regions. I would settle for 4% though if it is in line with other regions. Mind you, I am not advocating getting rid of it in the slightest. It is the duty of The People to pay taxes and the duty of the government to provide certain services only governments can provide. I just want to see the IDS on par with other regions so they cannot have an advantage over us.

We can include a deduction for hiring a disabled worker in this bill since it related to cutting the corporate tax rate.

The labor laws can be in another bill. The "at will" employment is a state law in the US, some states allow it and some do not. Here, it would be region by region. I do think that it is important companies give a reason for laying off an employee, which gives them a little accountability without tying their hands. I do think, as a matter of fairness, companies should not be able to fire someone who is doing their job simply because they may not "like" something that person did or does that is not related to the workplace in the slightest. For example, my aunt was laid off a few months ago from her job of 20 years because the new supervisor did not like that she did not go out and drink with her and her friends on the weekends. She was given no reason when she was fired, no documentation or anything. Ethically, that is horrible, to fire an employee who is well respected in a company for such trivial reasons as that. But in at-will states, it is completely legal right now.

[Associate Justice PiT]

     I saw somewhere that the Mideast had a progressive corporate tax maxing out at 5%. I'm not sure where one could easily find it, though. I don't know about the other regions.

[Talleyrand]

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Those are the Mideast rates.

[Zanas]

Thanks for stepping in and giving us this info Talleyrand. I'd like to hear what our other Legislators have to say on the matter before moving forward to voting or amending the budget. BaconKing ? Dereich ? Jerryarkansas ?

[JerryArkansas]

Right now what I have been hearing is good, and I think we should do this.

[Dereich]

I agree with the way discussion is moving on the corporate tax rate, but I'm not sure about the disabled tax credit.

[Fmr. Pres. Duke]

I agree with the way discussion is moving on the corporate tax rate, but I'm not sure about the disabled tax credit.

Maybe we can split them into separate bills? Although I am not sure Zanas would approve.

[JerryArkansas]

That would be good, so if one is to hard to vote for, it won't sink the other one.

[Zanas]

Ok, so I think we can assume BaconKing has disappeared in his attempt to break the world record of apnea free-diving in a locked up Austin Mini under the Arctic Ocean, so I guess we'll be moving on now. We'll let the income individual tax the way it is for now, but I think I'll be introducing something to reform it a bit cause it seems outdated. We'll reduce the corporate tax to 4%.

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Modifications are bolded.

Now we only have a narrower positive balance, and I'll be attempting to draft something of a $1 billion measure in favor of the employment of disabled people. But for now, I will be giving everyone 30 hours to correct me if I'm wrong on my calculus and discuss this further if needed, and we will be then proceeding on to a vote.

[Zanas]

As we've been discussing this, I figured I might just as well introduce this here and now, and let you a bit more time to discuss it or amend it. I hope my fellow Legislators will not take this move as an excess of power on behalf of the Speakership, as it is only my splitting up of what we discussed on the budget in two separate bills that we could therefore vote on simultaneously if possible.

To explain things a bit, there are roughly 9 million disabled workers in Atlasia, and that makes roughly 2 to 2.3 million of them in the IDS, as I gathered we make up to a quarter of the total Atlasian population. This bill would cost $4,000 in two years for each worker hired, i.e. $2,000 a budgetary year. Therefore, even if each and every disabled worker in the region were to change employer and be hired the same year, this would cost $4.6 billion in our budget. I think we can well assume that this incentive will therefore not exceed $1 billion, which would still require one out of each five disabled workers to be newly hired in the Region each year.

Anyway, I'll leave it to all of you to discuss and amend if needed.

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