FT 3-04: Commonwealth Budget for 2018

[Unconditional Surrender Truman]

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Sponsor: Harry S Truman, PM


In my capacity as President of the House of Commons under the Constitution, I have taken the liberty of opening this thread so that we may begin debate immediately. The Speaker may resume the chair at his leisure, or I can continue to preside in this thread if more convenient.

[1978 New Wave skinny trousers]

I must apologize for my recent absence in which I did not finalize the vote on the bank downsizing bill or did not open the debate floor on this bill. I would like to resume the chair, so:

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Order! I call the Prime Minister.

[Unconditional Surrender Truman]

Excellent! My compliments to the chair.

As I informed the membership in my message yesterday evening, and as should be evident from the proposal text, the bill you see here is still very much a rough draft and will undergo significant changes before we come to a vote. The rates and percentages you see here reflect the status quo as of the Revenue Act of 2017; in light of the fact that we raised several hundred billion dollars last year and spent comparatively little, I am of the mind that these rates can and should be adjusted downward for the coming fiscal year.

My first priority in this regard is the elimination of the regional sales tax; beyond this, I would also like to see a decrease of income tax rates for the poor and middle class, though I would like to hear what the Commons has to say before proposing a specific reduction. Thoughts?

[1978 New Wave skinny trousers]

I would support the elimination of the regional sales tax, given Fremont's budget surplus and the regressive nature of the said tax. Fremont's budget surplus would also lead me to support a reduction in income tax rates for the poor and middle class.

[Unconditional Surrender Truman]

Alright then, I propose the following amendment:

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I will apply to the Game Moderator for an official revenue estimate once these rates are finalized, but by my preliminary estimate, the amended budget would produce a little over $76 billion in income tax revenues (a significant reduction from $292 billion in 2017, but bear in mind our surplus for the current fiscal year was literally in excess of $500 billion). These figures are not set in stone, however, and I'm willing to consider further adjustments at the advice of the Commons. Thoughts?

[1978 New Wave skinny trousers]

Members shall have 24 hours to object to the amendment proposed by the Prime Minister.

I support the amendment proposed by the Prime Minister. I don't see a need for any further adjustments in regards to either the sales tax or the income tax.

[1978 New Wave skinny trousers]

The amendment proposed by the Prime Minister has been adopted.

[Unconditional Surrender Truman]

Excellent!

If anyone has any further thoughts re: tax reform, now is the time to say so; otherwise, I will ask the Game Moderator to prepare a revenue estimate for us and we can get started on the expenditures portion of the budget.

[Unconditional Surrender Truman]

otherwise, I will ask the Game Moderator to prepare a revenue estimate for us and we can get started on the expenditures portion of the budget.

This has been done; I'll get working on the expenditures portion, and hopefully we'll have our revenue numbers in the next few days.

[Fmr. Representative Encke]

Here's my very disorganized cost analysis. In most cases, rates were applied to existing numbers for federal revenues and then scaled down to represent Fremont's population.
https://drive.google.com/open?id=1tkU8HhHHNXrUgjtWUD9XQfOkhUuDY_paBUNQDAqhS4s

I haven't yet finished the Green Vehicle Promotion Act (honestly don't know where to start with that one), and the oil/nat.gas segment of the Royalties Act. Other than that, the estimates are finished, although I will probably go back and try to get more accurate numbers when I'm not so tired.

So far, total revenue from income tax is 85.9 billion, and total revenue with all of the other things added in is around 250 billion. The largest contributor is the Carbon tax, which specified 112.5 billion dollars in revenue for the first year and a 2% tax increase, putting this year's revenue at around 115 billion.

[Unconditional Surrender Truman]

Excellent, thank-you Encke!

Barring future corrections by the GM, this is what we're looking at in terms of revenue for 2018:

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For my part, I'll begin calculating how much of our 2017 surplus is left after various spending projects in the past fiscal year are accounted for.

[Unconditional Surrender Truman]

Below find a preliminary estimate of mandatory spending levels for 2018 (updates forthcoming):

EDIT: revenue updated 8/26
EDIT: expenditures updated 8/28

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[Fmr. Representative Encke]

Apologies for taking so long to finish this. Both this and the 3-06 analysis will be completed today.

[Fmr. Representative Encke]

Finished the cost analysis. Total revenue is $285.467 billion

[1978 New Wave skinny trousers]

Encke, you've been very helpful by formulating the revenue estimate for the Fremont budget for 2018. This is much appreciated, and I thank you for your service to Fremont. When looking at the revenue estimate, though, I was struck by how much the carbon tax is estimated to raise in revenue. It seems unlikely to me that it would raise even more revenue than the income tax. I was the MP who wrote the carbon tax bill and calculated the amount of revenue it would bring in. It is quite possible that I was mistaken in my calculations. If it isn't too much trouble, then would you mind doing your own revenue estimate for the carbon tax and checking over mine? I know that you've been doing a lot of good work relating to other estimates involving the budget, so I would understand if you didn't have time to fulfill my request. If you do get around to fulfilling my request, and if you come up with a revenue estimate different from the one I laid out in the bill, then I will introduce a bill to amend the carbon tax bill in order to correct the revenue estimate in it. For reference, the text of the carbon tax bill and my revenue estimate calculations can be found here: https://uselectionatlas.org/FORUM/index.php?topic=266772.0

[Fmr. Representative Encke]

Taking the source you provided at face value, then your numbers seem to be correct. The issue is probably due to the fact that the paper you cited is itself a cost analysis that uses a much more detailed methodology than I use.

Annoyingly, that source didn't provide the methodology used to calculate the ~90 billion dollar revenue for a $16.00 tax, but did cite the following paper

https://www.brookings.edu/wp-content/uploads/2016/06/carbon-tax-mckibbin-morris-wilcoxen.pdf

as the source of the 90 billion figure.

The paper is quite long and makes use of what is referred to as the 'G-cubed' model to make the estimate, which is summarized here:

https://www.brookings.edu/wp-content/uploads/2016/06/bdp118.pdf

This will take a while to work through, but perhaps it will give me some insight into economic simulation for my other GM duties. In any case, your numbers are correct.

[Unconditional Surrender Truman]

After much delay, the budget is finally complete!

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Thoughts?

[Mike Thick]

I'm cackling

[Fmr. Representative Encke]

I had a brief discussion with Yankee about the existence of NASA in-game; since all events prior to the reset are taken to be truth (unless the GM department says otherwise), then doesn't this mean that things that are not changed in-game (e.g. NASA) should be considered when crafting budgets?

Federally, this would be somewhat simple to do, as we could take the FY2016 budget and modify it to conform with the legislation crafted since the reset. Regionally, this would be quite a bit more difficult to do, but it's still an issue that needs to be addressed. For instance, what is the state of public education in Fremont? Are the UC schools now 'UFs,' and how much funding are they receiving?

All of the regions have had pretty enormous budget surpluses, and its clear that this is because new taxes are being introduced without factoring in expenditures that would transfer from RL.

[Unconditional Surrender Truman]

All of the regions have had pretty enormous budget surpluses, and its clear that this is because new taxes are being introduced without factoring in expenditures that would transfer from RL.

Traditionally, it has been assumed that state and municipal governments exist as non-playable entities; presumably, therefore, they continue to levy taxes and make expenditures as they do IRL, unless an act by the regional legislature overrides this by assuming financial responsibility for a particular program (for instance, Medicaid Expansion). As such, it's really a question of whether we want to cut taxes dramatically or assume greater responsibility for what are currently the functions of the state governments (in effect, cutting state rather than regional tax rates).

[Fmr. Representative Encke]

Thanks for the clarification on state vs regional governments. I was unsure of this because most legislation seems to allocate funds directly to local rather than state governments.

Does this mean that a potential regional sales tax would be an addition to existing state sales taxes that may exist in RL?

[Unconditional Surrender Truman]

Does this mean that a potential regional sales tax would be an addition to existing state sales taxes that may exist in RL?

I believe so, yes — yet another reason I supported the abolition of the regional sales tax with this budget.

[Pericles]

The budget looks good overall, but I believe more expenditure could be added, especially infrastructure spending. I would be interested to consult with other members to see what further expenditure they feel could be needed in Fremont.

[Unconditional Surrender Truman]

The budget looks good overall, but I believe more expenditure could be added, especially infrastructure spending. I would be interested to consult with other members to see what further expenditure they feel could be needed in Fremont.

I certainly agree on the need for greater investment in infrastructure. I have already introduced legislation (currently in the queue of the Commons) to expand our system of high-speed rail, and had planned to use the rather sizable surplus to finance this; but if the membership should be inclined to set aside a sum specifically for use on infrastructure projects in this budget, I would not be adverse to it.

[Canis]

I will support this budget and the rail bill