Trade fees discourage energy flipping, and are a suppposedly effective crownsink for keeping energy prices down. So what if the fees were raised? Would that result in a dramatic permadrop (taking away the constant price increase added by energy flippers and returning the energy price to its pure, variable form) or would it just enrage P2P player's who'd claim that it was punishing them for other player's actions?
Raise trade fee from 2% to 5%
Sat, 03/31/2012 - 05:52
Sat, 03/31/2012 - 11:46
#2
The main effect would be that
The main effect would be that the gap between buy and sell prices would be about 5% rather than about 2%. It would probably be split between buyers and sellers of energy, so that people who sold energy would get fewer crowns than before, while people who bought energy would have to pay more crowns to do so. Both groups would end up losing from your tax hike.
But changing the tax rate doesn't create or destroy materials, but only removes some crowns from the system. If some players are made worse off, then others would be made better off. Fewer crowns chasing the same goods would mean that auction house prices would tend to drop a bit. This would make people who buy stuff off the auction house better off, somewhat compensating those who participate in the energy market. But the real winners would be people who buy stuff off the auction house but don't sell much there, and buy their own energy with money but don't participate in the in-game energy market.
Sat, 03/31/2012 - 12:52
#3
~
Right now, whoever sold the energy simply receives 2% less than what it was paid. That's how the tax is applied.
Nothign mayor will hapen if increased to 5%, the prices will simply rise a little to counter the tax :p
So if current market price is 6500 (6370 actual price after 2% tax) it will increase to like 6700 (with 5% tax, that would be 6365, close enough :p)
Oh, what a huge change that will fix the economy. If there's a silly secret that I'm missing then enlighten me.
Sat, 03/31/2012 - 23:21
#4
This would be a good crown
This would be a good crown sink :D
Sun, 04/01/2012 - 01:48
#5
The way I see it...
It's very hard for you to target P2P players who buy large stockpiles of CE at once with an ad valorem tax; i.e. a tax that deducts based on 2% of whatever you're trading. It affects everyone; hence if anything it would be worse off for the less well-to-do players; and raising the trade fee only raises the disparity between richer and poorer players.
In economic terms, an ad valorem tax is always regressive in the end.
Nonetheless, it still makes for a decent crownsink save for one fact; while it does lower the price of CE this effect might be negated by a fall in sellers since they will make less profit; ultimately the decreased supply of CE might offset the increase in trade fee and cause CE prices to increase instead if not regulated properly.
Sun, 04/01/2012 - 06:10
#6
RE:
@Asalukan
The style of my writing was asking a question to the posters the effects of a rise in trading fees, nowhere in my comment did I state that I wanted them raised or that it was a good idea to have them raised. Your comment appears to be solely referring to the title of the thread...
@Juances
The silly secret is that it's a crownsink for those who buy energy for the sole purpose of selling it at a higher rate, therefore simply decreasing energy prices.
However, a problem that Kentard picked up on is that...something something something...yeah I don't understand his comment very much but I know it's an educated one lol. I don't know that much about the advanced functioning of economics but I do know my basics.
A problem I'm also seeing at the moment is that it would begin to force energy sellers to move towards a blackmarket.
Sun, 04/01/2012 - 08:45
#7
Abridged Version of my Post:
In economic terms, an ad valorem tax is always regressive in the end.
An ad valorem tax is a tax based off the value of all the goods involved in a single transaction. But nevermind that.
What I'm saying is, the trade fees will only widen the gap between rich and poor players (and more specifically P2P and F2P players).
If anything, everyone is affected, but P2P players less so than F2Ps given that we can assume that P2Ps are richer in general.
A problem I'm also seeing at the moment is that it would begin to force energy sellers to move towards a blackmarket.
Again this depends on the magnitude of the trade fee. Inevitably the black market is always a problem.
As for my other point on decreased supply; simply put, as you said, CE sellers will turn to the black market instead. Hence official CE prices will surge upwards as there is demand, but insufficient supply.
Which defeats the purpose of keeping energy prices down.
O M G, you want to rise taxes?
Are you mad?