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Economy and taxes; Guide
Topic Started: Apr 11 2018, 07:05 AM (219 Views)
I've been playing this series of games on and off for nearly five years. What surprises me more than anything is that I'm still discovering things about it. There are a few more things I've learned that I wanted to share. All of this relates to Power and Revolution. Consider the following information as tips for growing the economy. As always, all these things are timed so that economic growth occurs in December. This is to stop inflation rising to move closer to the GDP growth rate, something which seems to be less bad in Power and Revolution than the previous games anyway but still. Keeping the gap between GDP growth and inflation as large as possible ensures that you get the tax revenue that comes with the growth. When they're close together, you seem to get no better off even though the economy is meant to be growing. This is a long-standing thing in the series.

1) It's always been difficult to build a sustain a decent economic growth rate as a developed country. I guess one might say this is more realistic since most developed countries are seemingly stuck in the slow lane, with growth in this decade well below historical norms. Ireland is one of the few countries that has sustained a high rate of growth for years.

What I did in the game to generate the best growth possible, without using contracts, was to exploit the game mechanics slightly. Raising interest rates to 20 per cent at the start of each year and lowering them to the lowest possible level in December was the preferred technique in Rulers of Nations and Masters of the World.

When I began playing Power and Revolution, I discovered that the technique didn't work so well. The UK and France are both stuck with unemployment that keeps rising. I played as the UK several times and even adjusted my interest rate technique so as to raise the rate to around 4 to 5 per cent, rather than 20 per cent. I still had the rising unemployment problem. Also, when I played as Angola, using the interest technique with a rate of 20 per cent generated a large economic boom but the economy suddenly entered a depression around 2030, with inflation rising too.

What I did in the end was use the interest rate exploitation, but setting the rate at 4 per cent to begin with. I maxed out the stars in the "Work" tab for the top two categories, and reduced the minimum wage in stages, taking it down by about £200 to £250 per month over time. This kept unemployment down, and was around the 4 per cent mark for years. You need to be careful with this, though, since things can change unexpectedly.

What happened in my game was that unemployment started tumbling for no apparent reason after about 5-6 years. I didn't react quickly enough and the end result was that unemployment dropped down to 0.1 per cent very quickly, leaving me unable to hire extra teachers and researchers. I found a temporary workaround, which was to build more oil rigs in the North Sea (more on this later). It had the effect of pushing the economy into recession, and coupled with a rise in the retirement age and a large increase in the minimum wage, pushed unemployment up to about 3.5 per cent. After less than four months, the unemployment rate was at rock bottom again. I had been raising the minimum wage back up for many years and it's now at £2,000 a month after 9 years. The year I'm in now (2026 in the "Opposition" scenario) is the year in which I did this. It's not realistic for unemployment to remain at rock bottom like this. I haven't used contracts and the economy has grown by an average of less than 3 per cent a year so it makes no sense. The developers of this game need to fix this because no country in real life has an unemployment rate of 2 per cent or less. Singapore's rate is around this level and that's probably the lowest on the planet. The game needs reprogramming so that unemployment can never fall below 2 per cent, say. That's my opinion anyway. With some countries, it doesn't drop below about 3.5 per cent and that's ideal. Australia is one country I played as where every year it stayed in the 3.5 to 3.75 per cent range, which is great.

I did the usual stuff to generate economic growth (the interest rate exploitation), plus the passing of tax reforms every year. I play what someone on the old forum calls a "disciplined game". That's one of the reasons why I don't like using contracts. Contracts in my experience with RoN caused the industry and agricultural sectors to build up as a share of the economy but lead to the service sector declining sharply as a share of GDP. The service sector was left behind as the economy boomed in other words, and I didn't think that realistic.

So in the game I'm playing now, as the UK, I was playing as the game's equivalent of UKIP (Conformist Right Coalition). I placed the extra challenge on myself that I would carry out the programme for the first five years on the same basis as that party proposed at the 2015 election. This meant I had to spend about £3 billion extra on health per year by the end of the term, spend about £3 billion extra on defence, abolish inheritance tax and so on. The election promises on tax and spending add up in real life to over £30 billion a year. It was a great challenge, particularly when the budget deficit at the start of the game is equal to 4.4 per cent of GDP, around £91 billion. Making it even harder is that cutting or scrapping international aid only saves a few billion, less than half what the real life party could achieve (due to the international aid figures in the game being wrong). I left the European Union and implemented controlled immigration policies of course, since these are the two main policies the real life party is known for.

My strategy was to implement austerity, which is something I'm used to doing in the early years of these games now. What I did differently, however, was to build a lot more oil rigs in the North Sea than I usually do. In addition to this, I legalised shale oil and shale gas exploitation (or fracking as it's called in the UK). I also built the usual 10 oil wells off the north east coast of Scotland, and finally, I embarked on a huge electricity boom by building hundreds of solar plants over time (about 400), and have since moved on to wind, with three nuclear power stations either built or soon to be completed. GDP growth from all my policies averaged about 3 per cent over the first 7 years or so of the game but is slowing down a lot now.

The next points will cover a few more things I discovered that I applied to the UK game.

2) Oil platforms - there is no limit on how many of these you can build. You are limited only by space available for ones where production capacity is "good". Someone said on a different site that you can only build 5 wells for oil and gas for each region. I haven't tested that to be honest but will get round to it. There is no limit to how many platforms you can build in the sea, though.

What happened to me was this - I built around 50 oil rigs initially and that seems to have been the key driver in economic growth for one year, which hit 8.9 per cent. I then built many more a few years later, and did the same again. I think it was four times that I did this and now there are about 400 of them.

What happens when you build more is that your oil production drops sharply initially. This is partly to simulate the effect that most of the new platforms will be siphoning off production from existing ones. It's a bit clumsy and it will push down growth sharply. That's not a bad thing at the start of the year in this game, though. Also, you have to build LOTS more each time if you want an increase in production. I checked and noted the figures. Production in one year from doing this increased from 166.6 million to 203.4 million. I had no idea how much extra production I was going to get. I might have been unlucky and only got an extra 8 to 10 million. But I was happy to have an increase of 37 million. In 2026, the additional number of these oil rigs is 203 (last time it was 109 in 2024). The production numbers relate to before and after the rigs in 2024 were built. What will happen in 2026 I don't know but will keep you posted.

3) Airline ticket tax - I only discovered this after testing recently but this tax is very damaging economically. Playing as the UK, I decided to abolish it (both as part of this test and in a proper game). The GDP growth rate jumps by about 0.5 percentage points. So as the UK, that means getting rid of a tax that raises only £150 million (in the game, much more in real life) and getting a boost of £10 billion to your GDP, with £2 to £3 billion in extra revenue from the other taxes. It's a massive Reagonomics effect and a big help and I will do this in all my games from now on. The only snag you have is that the left-wing parties don't like it and it is difficult to get them to support a tax reform that includes its abolition. Make it a priority to get rid of this tax is my advice. It doesn't cause a hit to popularity based on "environment", only on "social", which is a surprise. So ironically, the green parties who don't like aviation in real life might back a tax reform that includes the abolition of the airline ticket tax, provided they either like you, or you have other proposals in the tax reform, or both.

4) Smaller taxes - this follows on from what I said about the airline ticket tax. Some of the other small taxes are damaging to the economy, relative to revenue raised. Ones I'd recommend getting rid of are the vehicle registration tax and the tourism tax. These both seem to be quite damaging to the economy, although less so than the airline ticket tax. Keep increases in tobacco and alcohol taxes limited. I was always raising these taxes to help make up revenue from reducing other taxes but it actually seems to do more harm to the economy than the extra money raised, unlike with some of the other taxes. The tax on petroleum products and the audiovisual tax seem to be the least damaging taxes, economically speaking. I raise these to help pay for reducing other taxes. It works well but the motorists or the arts union won't like you and the arts union will go on strike if you raise the audiovisual tax too many times. If you have the gambling tax or the tax on salt then I recommend phasing these out too.

5) Business taxes - these are all damaging to the economy and cutting these generally is the best economic strategy one can pursue in this game. The tax on financial transactions is classed as a business tax in this game I think and is I think the most damaging. The company tax and the tax on company turnover were the best ones to cut in RoN and MoW. But it seems to be different in Power and Revolution. The GDP boost from cutting the company tax is not as high in Power and Revolution as it was in the previous games, nor is the cut in tax on company turnover. It is still worth cutting them, though, but probably best to spend a given amount of money available to cutting the employer social security payments tax rate instead. I spent about £3 billion as a test on cutting each tax individually and the employer social security payments tax was the best one to cut to boost GDP growth the most. It may be different for other countries, though. It costs about £4 billion to cut the company tax rate by one percentage point in the UK. But in the US, you can cut it by that much and spend only about $12 billion. In proportionate terms, taking into account differences in GDP and population size, that's only about a quarter of the cost. So playing as America, it probably is best to prioritise cutting the company tax. I will be playing as the US later this month and will let people know how it goes. I intend to create an energy sector boom like I did with the UK. I will not be using contracts.

6) Creating an energy boom - by this I mean exploiting your shale oil and shale gas potential, plus conventional oil and gas, and also generating electricity from solar and wind. The UK is one of the countries where you can do very well from the first two of these three categories but where the third is more challenging. I did a few tests to see which countries have the best potential for an electricity production boom. Out of the ones I tested, the US, Spain and Italy came out top, with Greece and France at the bottom. I'm currently testing Portugal and will test Australia, Poland and Russia too, since I'm keen to play as these countries at some point.

Here are some figures for solar power potential per plant:

UK (average) - around 3.5 TWh
US (good) - 16 TWh
Spain (good) - 16.9 TWh
Italy (good) - 25.7 TWh
France (unsure) - 4 TWh
Greece - 0.26 TWh

And here are some figures for onshore wind per turbine:

UK (average) - around 2.5 TWh
US (good) - 10.6 TWh
Spain (good) - 6.65 TWh
Italy (good) - 0.13 TWh
France - 2.76 TWh
Greece (good) - 0.39 TWh

Nuclear power is worth it if you can afford it. It's more expensive than the other forms of power so it would probably be a good idea to build lots of the solar and wind first and then turn to nuclear later. Playing as the UK, I'll soon be left with no choice but to build nuclear power stations since the land is almost completely covered in either shale oil or gas wells, solar plants or onshore wind turbines.

Here are some figures for nuclear power per station:

UK - 21.85 TWh
US - 21.85 TWh
Spain - 21.85 TWh
Italy - N/A
France - 21.85 TWh
Greece - N/A

It seems to be the same for all countries.

In short, it seems possible to build a big energy boom in the US, Spain or Italy without having to build too many plants, turbines or stations each year. So if you want to go for this for a challenge then I recommend playing as one of these countries. Spain has a massive budget deficit in the base game, around 69 billion Euros. But building an energy boom will "grow away" quite a chunk of that deficit. That's how I intend to play it when I play as Spain anyway.

7) Offshore wind - you might be wondering why I didn't bother mentioning this. There is a reason - the game is bugged and GDP growth doesn't rise when you build offshore wind turbines. Onshore wind is fine but offshore wind adds nothing to your economic growth in the base game. I contacted Eversim and from what they said and the notes for the patch for the 2018 Edition, it seems that this bug has finally been fixed. I don't want to buy the 2018 Edition, though, not for the moment away. I hope Eversim will develop more patches for the base game but I think this is unlikely to be honest.

8) How it went when I played as UKIP (or Conformist Right Coalition) - well I said I had around £30 billion of tax and spending commitments to meet, plus a massive £91 billion budget deficit to deal with. I'm happy to say my strategy worked. After £80 billion of net spending cuts (with no cuts made to health), I had a budget surplus at the end of 2020. Overall, by the end of the first five years, I had cut taxes by £22 billion a year, invested about £3.5 billion extra net into health, spent about an extra £3 billion on the military, abolished inheritance tax, created two new public holidays, maxed out the stars in the secondary/higher education categories other than medical training (which creates a short-term economic boost), hired extra researchers, doctors and police.... I basically implemented the UKIP manifesto of 2015. Since it's not possible to raise tax-free allowances, I simulated the effect by cutting the income tax rates instead, and decided to reduce the employee social security payments tax too (with increases in real estate tax to recoup the cost). I was delighted with how it went. In my second term, I have cut taxes by more than £30 billion a year and increased spending by about £26 billion a year (I keep a note of all my spending and tax changes). It's going well, with a budget surplus still about £75 billion a year even after all the extra spending and tax cuts. The only problem is that the energy boom is about to come to an end and it will be difficult for me to raise the number of researchers to 500,000 by the end of my third term as I want to. I've managed to get the number up to 400,000 but recruiting more will be hard because I can't get the unemployment up without messing up oil production by building more rigs in the North Sea.

Anyway, guys, I hope you find this information useful. Please feel free to mention anything I might have forgotten.
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Update on my game as the UK.

The extra oil platforms produced no additional oil. 203.4 million is probably the maximum possible amount I can produce each year.

I built 71 more onshore wind turbines in 2026, and there is next to no space left in the country to build any more. The economy grew by 2.2 per cent in 2026, which is decent and as good as it was going to get. I hoped to build at least 100 wind turbines but the land is more or less completely full and I needed to reserve some space for nuclear power stations.

My strategy for 2027 in progress:

- Building 10 nuclear power stations;
- Raising the minimum wage from £2,000 to £2,100;
- Raising the retirement age for both men and women to 67 from 66, to try creating extra unemployment so that I can fill the research and teaching posts;
- And increasing public spending net by £4.2 billion, with most of the additional money going on research.

There is this strange police salary bug when you play as the UK too. It's triggered when you increase the minimum wage and sometimes when you increase police officer numbers. It pushes up the police salary to more than £5,000 a month, causing a multi-billion pound hit to the public finances and increases spending. So if you're playing as the UK then be wary of this. To get round the bug, just keep an eye on the police salary before making any spending changes at all and reduce it back to the normal level (or as close as possible if the salary massively jumps).

The result of my strategy was that unemployment jumped up from 0.1 per cent all the way to 3.35 per cent. Good news is that the posts have been filled. Bad news is that unemployment now (in June) is tumbling again and will soon hit 0.1 per cent again. In the May 2027 election I promised to hire additional researchers, teachers and doctors. So what I will do is a second spending review in June, massively increasing researcher numbers (to 500,000), increasing teacher numbers to at least 750,000 (from 715,000) and increasing the number of doctors from 180,000 to 200,000, taking the population per medical doctor down to levels closer to Italy. An extra 10,000 police officers is also something I'm contemplating. To ensure these posts get filled, I will raise the retirement age again next year to 68. I'm expecting the same thing to happen next year as this year, a big initial rise in unemployment, which then falls to 0.1 per cent within a few months. So that's why I need to arrange to hire as many people as I can in one go. On research it's something I want to do as soon as possible anyway. I've made 12 research discoveries already.

Growing the economy will be hard after 2027 is over, though. The tax reforms can only do so much and the only way of generating additional electricity is offshore wind, which is no good in the base game because it's bugged and adds nothing to economic growth. I don't want to use contracts but I'll be pretty much be at a dead end. Growth will be well below 2 per cent each year and I don't think I can counteract this, sad to say. :(
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Update on how things are going with my UK game. I feel like I've messed up. In 2028, I decided to dismantle some onshore wind turbines that I built and instead replace them with nuclear power stations the following year. There was enough space to build enough nuclear power stations to generate enough additional electricity to offset what I was losing from dismantling the wind turbines. Unfortunately the economy as a whole in 2028 still only grew by 0.8 per cent. Unemployment being at rock bottom is causing the economy to be stuck in the very slow lane.

The other problem is that now there's barely enough room to build any nuclear power stations in the places where the now dismantled wind turbines were. I think the game is a little bugged. I can't find space to build as many as 10 nuclear power stations in the places where the wind turbines were (Scotland). Yet I can find space to build two or three in the South of England (even though there should be no extra space there as there wasn't before). Worse still, I did a test to see what would happen if I dismantled more wind turbines. I started with a test to dismantle all 182 remaining ones, then 180, then 100, then 50 and finally 20, and the game crashed about a week after the dismantling was complete each time. There is a bug that's sometimes triggered whereby the game crashes on the exact same day for no apparent reason. When this happens then you cannot continue your game basically. That happened when I played as France and also with other UK games. I thought that bug had been triggered this time but not quite. What happened was that the game would continue past the day when it usually crashes (Monday 12th February 2029), provided that I don't dismantle any energy infrastructure.

What I should have done is got the nuclear power stations built instead of the solar and wind from quite an early stage. It would be expensive of course, but the cost of the power stations is usually covered over five years. So let's say I built 10 each year at a cost of £1.4 billion each, and did this each year for five years, I would have £70 billion of additional energy spending. That's a lot but the budget surplus is high and I could have cut taxes less each year to help reduce the hit to the public finances. It would have been a better outcome in the long-run. There would have been room to build more than 500 power stations over time. That would have enabled a longer-term energy boom and I could still have done the big tax cuts that I did over the early-to-late 2020s but at a slower pace. Also I could have probably built 5 shale oil wells in Yorkshire and the Humber but didn't (focused on Scotland, and the North West and North East of England). I'm tempted to start this UK game again to be honest and probably will the week after next (busy week next week). I'll act sooner to prevent that 0.1 per cent unemployment problem for sure. The only advantage of playing a long game and getting it wrong is that, because I saved the game at the end of each year and recorded all spending and tax decisions taken, I can look back to see what I could do differently. The first term of a replay would play out very similarly to the current game.
Edited by warrenblinston, Apr 13 2018, 07:25 AM.
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Because of your detailed topics on how the game works, I've decided to make you a moderator of this forum area alongside TMLC.
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