IDS Budget and Tax Committee

[Associate Justice PiT]

    I don't think it's possible to assign any sort of price tag to the Pentagram Creation Act. The act specifies that the pentagram will be several stories in height, which doesn't give us much to work with. Not to mention we'd also have to talk about revenue due to the PCA, since the pentagram is intended to serve as a tourist destination.

We could always do a PNOOCAM (Pull Numbers Our Collective Asses Maneuver).

     Pretty much. The Transamerica Pyramid was built from 1969-1972 & cost $32 million. Assuming we want a landmark of similar importance & adjusting for inflation, let's say the Imperial Pentagram costs $200 million.

[Associate Justice PiT]

     I don't think it's possible to assign any sort of price tag to the Pentagram Creation Act. The act specifies that the pentagram will be several stories in height, which doesn't give us much to work with. Not to mention we'd also have to talk about revenue due to the PCA, since the pentagram is intended to serve as a tourist destination.

We could always do a PNOOCAM (Pull Numbers Our Collective Asses Maneuver).

     Pretty much. The Transamerica Pyramid was built from 1969-1972 & cost $32 million. Assuming we want a landmark of similar importance & adjusting for inflation, let's say the Imperial Pentagram costs $200 million.

I like it.  Now, how much money are we getting from it (ticket sales I, think 20%) and how much from the Safe Roads Initiative?

     According to Wikipedia, Graceland, Memphis's biggest attraction, sees 600,000 tourists a year. The Pentagram is too new to really be a magnet by itself, but assuming they pay an average of $10/person to go inside (ticket prices would probably be a bit higher & the real number of tourists is probably somewhat higher, but also some tourists would probably not go to the Pentagram), that figures to $6,000,000/year. Since we are obviously not close to recouping the total costs, we'll be getting $5,700,000/year from it.

     As for the Safe Roads Initiative, the Department of Transportation says that 44.4 million new & used cars were sold in the U.S. in 2009. Though it was part of a significant downward trend, we'll simplify things by assuming things have remained static since then. Conveniently, dividing by five to find the number of those cars in the region cancels out multiplying by five to account for the amount of the fee, so the Safe Roads Initiative just brings in $44,400,000/year.

[Associate Justice PiT]

You know, we are going to have to codify how we do this budget thing in the future.  I am thinking at the beginning of every year we present a new budget including all of last years appropriations.  Otherwise this will be a mess to keep a handle on.

     I'm thinking I might keep a running tally on all new taxes & appropriations passed. If nothing else, it gives us a reason to be specific with money totals.

[Associate Justice PiT]

     I had difficulty finding much on corporate incomes, though this article by the Huffington Post suggests a national corporate profit rate of $1.66 trillion/year. Dividing by five, that gives us $332 billion/year in the IDS. Since new businesses obviously don't pull in all that much, I'll simplify things by ignoring their reduced corporate taxes & multiply that figure by 0.098, which gives us a total revenue rate of $32,500,000,000/year. I'm going to assume that our lowish rate combined with a lack of loopholes provided for by the Put the "free" back in Free Enterprise Bill means that we see minimal tax avoidance, unlike our federal counterparts.

[Associate Justice PiT]

     According to the Department of Energy, nuclear plants were responsible for the production of 800 billion kWh of energy in 2009. There are currently 104 active reactors in the United States, so multiplying by (35/104) gives us 270 billion kWh produced in the region.

     The Nuclear Energy Institute site provides average costs. Adding up the average costs of fuel, operations, & maintenance gives us a cost of $0.0203/kWh. Rounding up to $0.025/kWh, since they obviously will have to sell for a gain, we get a total revenue of $6.75 billion for sales of electricity produced by the regional nuclear plants.

     The results of this provision is essentially a cut into the corporate income tax rate, so we find the amount of this cut by multiplying by the corporate tax rate & the percentage cut provided for by the bill, giving us $66,100,000/year. Please note that this is a decrease to the revenue of the region, as we are providing for a tax break for these plants.

[Associate Justice PiT]

     Beer is typically 10-proof & wine 24-proof, to my knowledge. As a proof-liter is the amount of the alcohol that would constitute one liter were it at 100-proof, one proof-liter of beer & wine would be equivalent to 2.6 gallons & 1.1 gallons respectively. That gives us rates of $0.385/gallon for beer & $0.909/gallon for wine.

     According to this site, spirits are typically 70-120 proof. Obviously weaker spirits will be preferred over stronger ones, so 80 proof seems like a decent enough guess, especially since it works with the proportions I've heard for alcohol content in beer, wine, & spirits. As such, 1 proof liter of spirits would be equivalent to 1.25 liters on average, or 0.325 gallons. That gives us a tax rate of $3.31/gallon for spirits.

[Associate Justice PiT]

     That looks right, though it should be 0.274 billion. This isn't the UK.

[Associate Justice PiT]

Pentagram Creation Act? Was that really the best way to spend $200 M?

     The idea is to create a tourist attraction to simultaneously boost the regional economy & bring in revenue. I expect that the revenue from that will increase as time goes on & its notoriety increases. Might want to work to speed up the process.

[Associate Justice PiT]

     I just realized that our rate is per-cigarette while the rates you were looking at were per-pack. A pack contains 20 cigarettes (I think), so our tax rate is actually $0.88/pack. Running the computation again with that, I get $6,034,000,000/year for revenue from cigarette taxes.

[Associate Justice PiT]

     The fees & charges total is actually $0.0501 billion.

[Associate Justice PiT]

     The fees & charges total is actually $0.0501 billion.

That's what I meant.  I'm glad you're here to spot these mistakes.

     Happy to be of service. Conversion errors are always easy to make.

[Associate Justice PiT]

     According to this report, more than 5 billion cigars were consumed nationwide in 2006. If we assume ~1 billion for the IDS, at $0.08/cigar, that gives us cigar tax revenue of roughly $80,000,000/year.

      No precise numbers are given for later years, though according to the article a bill passed by Congress IRL in 2009 vastly increased the national cigar tax, which has dealt a severe blow to the cigar industry. No such bill was passed in Atlasia, so the most recent figures would actually not be that accurate for our purposes.

[Associate Justice PiT]

     Thanks for finding that. I was looking for that data, but without much success. "Loose tobacco" doesn't appear to be a term that sees much use, so we probably won't find anything better for it.

[Associate Justice PiT]

     I found this site estimating the revenue that would be raised from legalizing & taxing marijuana. Granted the organization behind it is obviously very much biased towards doing such a thing, though it's better than nothing.

     The IDS has roughly twice the population of California, but a much lower proportion of marijuana-users for obvious reasons. For simplicity's sake I'll assume they have roughly the same amount of marijuana use in absolute numbers.

     Now the site gives $770-900 million as an estimate for the yearly revenue of a $50/ounce tax on marijuana. As I said, they are rather bullish for this sort of thing, so I'll err on the low end at $800 million. The regional tax is $3/ounce, which gives us $48,000,000/year.

     I know that our tax is much lower than what they suggest, but I don't think a $50/ounce tax could actually work. I read on another site (forget what it is, though I could look for it) that the average street price of marijuana is ~$220/ounce, with the lowest-grade versions costing ~$90/ounce. Well, how many legal substances can you think of that are that expensive, other than precious metals like gold? Black market prices are inevitably higher than regular market prices due to the high demand relative to supply that fuels them along with the danger inherent to them. If marijuana is legalized, then the price of it should drop to a more reasonable figure. I'm not sure what that figure would be, though $3/ounce seems like a good guess for a tax to assign to that figure.

[Associate Justice PiT]

     Don't have time to look right now, but per the Unified Law Code Initiative our electricity excise tax should be the same as it is over in Georgia. If it turns out there is none there, then we can either make one or just leave it stand at $0.

[Associate Justice PiT]

     Our tax rate is nearly flat, but I approximated it as being flat. Unless otherwise specified by statute, our laws are those of Georgia c.2006. As you can see from Yelnoc's post that you quoted, Georgia's income tax is actually split into six brackets, but they are all at such low incomes that the ultimate effect is close to that of a flat tax.

     Anyway, the IDS corporate income tax rate is 8.6%. I've noticed that that's actually a bit high for a sub-national government, though, so I would be happy to assist by reducing it to 6%.

[Associate Justice PiT]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

[Associate Justice PiT]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

Sure.  We'll have to go through the legislature I suppose.  Should the bill set both income taxes at 5.8% or just corporate?

     Income taxes are already 5.8%, so that's not a problem.

[Associate Justice PiT]

     5.8% should be fine, unless we want to change that as well.

     The corporate income tax is problematic insofar as it makes us uncompetitive when regions like the Mideast have graduated rates that max out at 5%. If we lowered the corporate income tax rate to 5.8%, it would simplify the budget process & help the region's economy.

Sure.  We'll have to go through the legislature I suppose.  Should the bill set both income taxes at 5.8% or just corporate?

The Mideast "budget" is just a proposal. I would wait until the Mideast actually assesses what their final budget is before worrying too much about "competativeness". GM's assessment to follow there.

     It'll probably take us a little while to get to actually voting on the proposed change anyway. We've been talking about the possibility of reinstituting the death penalty, which has caused the Legislature to fall into disarray. End of the school year doesn't help.

[Associate Justice PiT]

     As we found out earlier, 270 billion kWh is produced in the region each year. That is equivalent to 8600 kWh/s, assuming continuous production, which is something of a stretch of course. That is equivalent to about 31000 MW of generating capacity, for a maximum property valuation of $1,550,000,000 for the region's 35 nuclear plants.
 
     At that point you'd need to find the property tax rate & the real property value of these plants & calculate the differential. I suspect the real property value will not be easy to find, though.

[Associate Justice PiT]

     I think you're right. It seems like this initiative would only impact revenue for local governments, so it's not really relevant to us.

[Associate Justice PiT]

     I'm guessing the reason that the state spending on education is 2/3rds of the original is because we only repealed the School Choice Initiative about 1/3rd of the way through the year?

[Associate Justice PiT]

     According to page 12 of this PDF, the state of Montana issued about 131,000 driver's licenses in 2010. Multiplying by (80882282/989415), we get about 10,700,000 issued for the IDS. At an increase of $1 per license, that conveniently gives us $10,700,000/year.

[Associate Justice PiT]

     I don't even know what an offshore religious institution would be or why that initiative was passed. Unless someone who knows about the reasoning behind it would like to step forward, I agree that we should probably just ignore it.

[Associate Justice PiT]

     The Education Tax is equivalent to the difference between the Education budget & the amount put into the Lottery Education Fund, which is equivalent to 90% of what is raised by the regional lottery. If we could find out how much that is, it would be possible to figure out the value of the Education Tax.