Company Man's Guide to ETW Economy

**marceror** · March 19, 2009, 08:30 PM

Originally Posted by coman

No. You're wrong. I'm so often not right, there's a stool in the corner with my name on it in in every classroom, board room and VFW lodge in the country.

Okay, but I was referring to ME being wrong -- perish the thought -- about you being an accountant of some sort. But who am I kidding, I carry around my own stool anymore, just incase I end up somewhere that hasn't appropriately prepared for my arrival!

**coman** · March 19, 2009, 08:46 PM

Not a problem. I have pointy paper hats and safety padding enough for everyone.

**DocQuixotic** · March 20, 2009, 05:08 AM

Thanks Coman, that screenshot helped a lot. Having gained a few trade partners, my income rose to 26k in a matter of years. You also seem to have about twice as many exports as I have, which may explain the remaining differences. I'll try to gain some more supplies and see how it goes

**herb0815** · March 20, 2009, 08:51 AM

Good guide!!!

One thing that is also important for your economy is the minister of treasury. Having one with 8 stars or more easily adds 8% to your trade route growth per round, increases your taxincome and the growing of your wealth in your hometowns.

It is a good idea to spend some rounds to get a good minister of treasury and by using a constitutational monarchy you can keep him until he bites the dust.

**coman** · March 20, 2009, 10:29 AM

OKay.

Keep in mind, trade lane growth is generally speaking 15-500 ducats per turn. You can get a total of 80% bonus to it that I've seen in the game. It's not a "Trade Lane bonus", but a multiplier on the adjustments made each turn. Also known as extra profit for your exports!

**tuore** · March 20, 2009, 11:08 AM

Awesome! Helpful! I'll go right away test! Economy has always been interesting for me... dunno

**Frederf** · March 21, 2009, 12:16 AM

I'm curious if anyone picks their trade partners in a certain direction as to minimize the number, length, and position of trade routes which require defending.

**MadFrancis** · March 21, 2009, 05:51 AM

Okay I was looking at numbers. Theoretically the lost income (from town wealth) from over taxing your upper classes is more than made up for by the tax rate itself on your other sources of income. Even dropping a 3000 town wealth province to a town wealth of zero is only roughly a 700 gold loss in taxes by the time town wealth hits nil. The significantly higher taxes on your trade, ports, industry, farming and mining income should be able to more than make up for that loss. Losing 10% taxation of 3000 town wealth (even if that number is growing by 50 points a turn) is more than covered by taxing everything else at 30%, at least within the reasonable scope of the game's timescale. Sure if your game lasted 1000 turns it might not be worth it, but it won't, and the miniscule increases to a miniscule part of your taxable income does not justify losing roughly 25% taxation on all your other (much more considerable) incomes.

As far as I can see, for most profitable provinces town wealth is around 10-20% of your regional economy. In provinces that have less industry, mining and farming it can be as much as 30% of your regional economy. These are rough estimates, but should be fairly accurate from the sampling of regions that I conducted.

Example (numbers have been rounded off to provide my brain with easy math): Berlin has 10,000 total regional wealth. 3000 of that is roughly 31ish% of the total economy (I chose a low industrial, farming, mining region to show the upper extremes). I can tax that region at 10% (5% for lower class growth if I have undeveloped towns in any of my regions that I want to develop, and 5% upper class to try and increase my regional total wealth) for 1,000 gold. Or I can tax everything but town wealth (let's just say that Town Wealth dropped from 3000 to 0 in a turn) at 30% (5% lower classes, 25% upper classes) and earn 2,100 gold. That's more than double your previous income! Assuming you are adding something around 50 points per turn to town wealth with 5% upper class taxation, that is a .5% increase to your total town wealth per turn at a cost of 1,100 gold per turn. Within the scope of this game, those numbers are NOT worth it ... ever.

And averaged out over your entire empire these numbers are actually more skewed towards town wealth growth being absolutely pointless to this game and your empire's growth and income as a whole. With 20% more taxation of all of your Empire's trade and mining and industry and farming the loss of town wealth becomes less and less important. You can invest in newer technologies faster to boost your non town wealth incomes sooner. You can higher armies faster and take over your neighbors sooner. Setting low taxation for upper classes is like handicapping yourself intentionally because the game is too easy otherwise.

Okay.

Someone please tell me I am wrong. Why would CA create a mode of taxation that was completely worthless. The increases to town wealth (for lowered upper class taxation) and the taxes reaped from that portion is such a minscule part of your economy that it only benefits you from keeping taxes on upper classes as high as possible as allowed by unrest levels.

God how annoying if true. I don't want it to be true ... someone tell me that town wealth is actually meaningful to this game in any sort of way. Show me how keeping your upper class taxation rates low actually aids your game. Please ...

anyone ...

**coman** · March 21, 2009, 02:08 PM

Didn't see your updates to this thread:

1. Upper class taxation is your paycheck.
2. Lower class/middle class taxation is your milk money.

You don't live on your milk money, but you don't get milk without it. Since there is no per capita tax, taxes take on the role in game of unlocking resource points and that's it. Since your looking at most regions hitting max population, your rationale for low taxes on the masses and higher taxes on the upper class is correct and pragmatic.

In Monarchies and Constitutional Monarchies, economies grow in the upper class fairly well but are not vast and rapidly growing. Once you unlock other research and have a truly modern economy in a Republic this is no longer the case. When you have 150-200 region wealth growth per turn, you have to watch who you piss off.

Under Republics the upper class is extremely unhappy to be taxed. In early game and in AbMon's the upper class is your bread basket, milk money and paycheck. The game invariably drives you to a revolution, both socially and economically. It will eventually have to change, or you'll stagnate and hangfire like many economies in Europe in this period and later actually did.

**MadFrancis** · March 21, 2009, 02:29 PM

Originally Posted by coman

In Monarchies and Constitutional Monarchies, economies grow in the upper class fairly well but are not vast and rapidly growing. Once you unlock other research and have a truly modern economy in a Republic this is no longer the case. When you have 150-200 region wealth growth per turn, you have to watch who you piss off.

Under Republics the upper class is extremely unhappy to be taxed. In early game and in AbMon's the upper class is your bread basket, milk money and paycheck. The game invariably drives you to a revolution, both socially and economically. It will eventually have to change, or you'll stagnate and hangfire like many economies in Europe in this period and later actually did.

Okay ... I'm confused. I thought the varying governments (ABMon, ConMon, and Rep) varied how much your trade and economies were worth, but I didn't see that it effected your Town Wealth value or its growth rate, I thought it was just trade and industries that got boosts. Are you saying that Rep or ConMon gives a significant bonus to Town Wealth (specifically) growth numbers?

Because unless they effect your actual Town Wealth value and more importantly the Town Wealth growth value, I still am not seeing why you would not want to always tax the upper class as much as possible.

**coman** · March 21, 2009, 03:17 PM

I will answer here to keep it contained in the principal thread I've started about economics.

I've posted a screen shot of two turns of England's region wealth bar in 1713. At the end of the second turn it is '1974', the previous round added 62 ducats to the sum.

Just to make sure we're on the same page.

The blue circled area is your regional wealth attributes. This indicates the perpetual fixed income from your town and port structures, it also includes your "town wealth" value and your subsistence farming level. So each port, each factory adds a variable "+750 to region wealth".

Town wealth is a sum, it's accumulated over time, or reduced over time as per the advisor and the guide, negative reductions will effect this stat. "Town Wealth" is cumulative from all towns, not associate with any single town and is visible at the region level.

Now to try and understand where we can come together and learn from this dialog, over time the "Town Wealth" value, which is the whole reason to avoid taxing the wealthy, continues to increase. Over time, assuming you hit the building limit and research limits, your structures, enlightenment, technologies and ministers no longer contribute to region growth but instead simply to town growth.

The only value that will continue to increase if nurtured is "Town Wealth".

Very careful taxation and deliberate construction and technologies will increase your value to a point where it exceeds all other single aspects of your region and eventually in some smaller regions without many industrial centers, all other income entirely. If you defer taxation from the rich, or at least excessive taxation, you will eventually have a very wealthy and stable monied class from which to draw regular, valuable taxes.

In England, for example, which can rely on very low taxation due to massive amount of trade income, the wealthy can accumulate a very high "Tax Wealth" value in just a period of 10-15 years. In a trade deprived nation that requires heavy taxation, like Prussia the Absolute Monarchy, "Town Wealth" will grow much slower.

In ten years of low taxes in England, I was able to expand the "Town Wealth" by 2240. In Prussia it took 12 years just to expand the "Town Wealth" 800 ducats. Given that we're talking about a game with the potential to span several hundred turns, the potential for "Town Wealth" to become significant exists and is contrary to your argument.

Ports, iron smiths, farms, resources are all likely to be individually greater than the sum of a region's town wealth for a very long time. Given that point, in a case where you nurture your town wealth over a long period of time it can easily become a larger part of your tax base, growing say from 5% to 30% of your regions income.

So to demonstrate yet again:

Turn 0 town wealth of England '1000'
Contribute average town wealth 75 ducats per turn
5 year growth is 750 ducats
Taxable difference after 5 years at 30% is 225 ducats per turn

Turn 0 town wealth of England '1000'
Contribute average town wealth of 75 ducats per turn
10 year growth is 1500 ducats
Taxable difference after 10 years at 30% is 450 ducats per turn

Turn 0 town wealth of England '1000'
Contribute average town wealth of 75 ducats per turn
50 year growth is 7500 ducats
Taxable difference after 50 years at 30% is 2250 ducats per turn

Turn 0 town wealth of England '1000'
Contribute average town wealth of 120 ducats per turn
25 year growth is 6000 ducats
Taxable difference after 25 years at 30% is 1800 ducats per year

Turn 0 town wealth of England '1000'
Contribute average town wealth of 120 ducats per turn
50 year growth is 12000 ducats
Taxable difference after 50 years at 30% is 3600 ducats per turn

The difference in earnings become compounded over time. We're not talking about a credit card bill, but essentially as it's accumulated, and assuming that in very few cases you're constantly withdrawing (per your argument) you will experience no sustainable town growth and miss out on several hundred thousand ducats worth of taxes per region over the course of your campaign.

I suspect the town wealth is considered quite small because if you were to conquer a huge nation, you would benefit from subsistence farming, any structures there and a massive pool of town wealth. They probably tuned this variable where a wise economist can easily grow and maintain a very solid treasury. In my late Prussia campaign, I have about 60,000 Town Wealth across 12 regions, principally focused in 4 core regions.

If you follow your own advice, your towns will be bankrupt and draw from your national treasury every turn.

**coman** · March 21, 2009, 03:35 PM

So now that we've established a baseline, your position can be further discussed.

If I were to neglect town growth and instead pull the maximum amount of Upper Class tax possible, assuming that it IS possible with no unrest modifiers:

England at -30 ducats per turn from Year 1700 = bankrupt in 17 years.

In 17 years (I happen to have a save at 1718 for England) I would be withdrawing -36 ducats per turn and town wealth balance would be bankrupt around 1714. However the extra 20% tax rate would likely have resulted in 1100-1400 more tax revenue for the region per turn.

I understand your point about the numbers being imbalanced and I can see your point here with "why bother" with town wealth with it's current value. However, what I see here is that in the long view, even 20 years, you end up with significantly more value in your territories instead of a very poor upper class that is being constantly subsidized by the central government.

When you look at the tax base overall, instead of a single region, if you can expand a nation to 10 regions. Really small regions with little support depend on that "Town Wealth" to prevent sucking money from the government. As the penalties climb, instead of growing at a very modest 30-40 ducats per turn, they begin sucking away, 30 ducats per turn. In a region that contributes exports but only 1000 region wealth, you're going to suffer as a whole within 10-15 years.

I do get your point. I'm not saying that it's invalid. You've given me something really thoughtful to ponder and examine and in the end, I think that the town wealth modifiers need to be adjusted up. I wonder if they are variable on different difficulty levels.

As to my comment about government types, I cannot tell if there is a modifier, but the sister statistic of the economy and taxation is happiness and unrest. Over time, higher taxes require garrison troops, buildings that could be contributing to Region Wealth going to churches and bawdy houses and I think this factor alone offsets the "tax the rich" mentality.

There is room for a happy balance, and I think in the long run they have tuned the economy where a frugal tax policy and balanced growth and capital investment plan will pay higher dividends than taxing and spending.

Jesus Christ, I sound like a conservative.

**Frederf** · March 21, 2009, 03:52 PM

What if you exempted lesser regions from tax and then taxed the strong regions heavily? That would prevent the lesser regions from sucking at the overall economy (being null by exemption).

**coman** · March 21, 2009, 03:58 PM

On the topic of taxation and popular unrest.

Under any political system for both Lower/Middle and Upper Classes:

Lowest tax bracket 5% = 1 Tax Burden Unrest Point
Second to lowest tax bracket 10% = 2 Tax Burden Unrest Points
Middle Tax bracket 15% = 4 Tax Burden Unrest Points
Second to Highest tax bracket 20% = 8 Tax Burden Unrest Points
Highest tax bracket 25% = 12 Tax Burden Unrest Points

Even with clamor for reform in a Republic, some happiness from structures, a few points from ministers to offset how terrible some of them are the difference between 24% and 64% tax income is significant.

So significant that if I have a few high tax regions well garrisoned that in a few turns of extremely high taxes I can negate any benefit from low taxation and "Town Wealth" growth over a very long period of time. It's extremely manipulative of the game system, requiring big garrisons, many regions being exempt from tax and kind of breaks the entire economic model.

I'm not defending the system here folks, just walking through it and increasing an understanding.

I think as a result of this (here comes the economist in me), I have to say that there needs to be a method to compound population happiness, wealth and increased productivity from lower taxes.

When a population has higher happiness it invariably means their basic needs are met, and I'm not discussing Tibet here folks, but as it stands there is a direct relationship between low taxes on the rich and and a very minor amount of growth as a result of that.

I posit that lower taxes on the rich AND the poor results in greater development to an economy, as in real life, by savings, individual accrual of wealth and assets. In terms of Empire, the benefits of having a milk cow in the family are immeasurable, compared to having a second property today.

Economy fact (not politics), demonstrates that higher taxes on the wealthy actually improve national incomes, development and opportunity for the less wealthy. After looking at some math and evaluating the economic system in the game, I'm fairly certain that the in game mechanics were copied out of a Ronald Reagan tax policy. The game posits exactly what the American fiscal Conservative movement states, when in historical fact the proof demonstrates otherwise.

Now I must certainly make a mod for the economy as well.

**coman** · March 21, 2009, 03:59 PM

Originally Posted by Frederf

What if you exempted lesser regions from tax and then taxed the strong regions heavily? That would prevent the lesser regions from sucking at the overall economy (being null by exemption).

Exactly the same conclusion I was coming to and posting on.

**coman** · March 21, 2009, 04:03 PM

So basically how I perceive the tax model and economy here, is that the national development and region wealth should be reversed.

Lower taxes on the rich should result in the ability to make major capital improvements on a region. The poor don't open factories, or produce ports, or start massive textile mills that increase the regional wealth by 25%. The wealthy do. If the population was responsible for this growth, per the way it's implemented, the entire wealth of the port, or the mill, would be centralized by the government and not captured via a tax revenue. Stupid.

The poor make constant shifts upward over time to a middle class, then eventually over several generations may be able to establish themselves in the upper class. This is at least how the world worked in 1700-1800 and I would dare say up to 1995 in the United States and still how it works in many non-credit/capital devouring countries.

The game's economic model disregards the population and therefor invalidates the requirement of managing a population entirely after the resource points are available. Who cares about the millions under your care once you've got your final village.

As a result the game needs to account for lower taxes = more individual spending, more individual savings and that means your "Town Wealth" should consist of both classes of population increasing their own wealth over time. While there may be some argument that there is no mechanism in most countries in 1700 for the lower orders to better themselves, like I said, a family that had a milk cow fared much better for a variety of reasons. They worked harder, lived longer, had smarter, healthier children that contributed more...

This is incredibly stupid. Whoever thought this up needs a new job title.

I'm right there with you MadFrancis. Coman is

.

Thanks so much for bringing this up, I really appreciate it.

**JimMorrison** · March 21, 2009, 04:05 PM

So, I was having the same question as MadFrancis, and I come and see this discussion unfolding, and well, I feel that I am not as confused as either Francis, or you, coman.

Originally Posted by coman

Didn't see your updates to this thread:

1. Upper class taxation is your paycheck.
2. Lower class/middle class taxation is your milk money.

Okay, but under a Republic, you have no Upper Class. And how do you define the difference between "paycheck", and "milk money"? Are you just using those terms because they sound fun? I would think that "milk money", which is traditionally given to you by your parents, would therefore come from the Upper (or Middle) class, whereas you get your bacon from the Lower (or Middle in a CoMar), and bacon as we all know, is a euphamism for your paycheck. Regardless, they are both means of taxation, -not- sources.

Originally Posted by coman

You don't live on your milk money, but you don't get milk without it. Since there is no per capita tax, taxes take on the role in game of unlocking resource points and that's it. Since your looking at most regions hitting max population, your rationale for low taxes on the masses and higher taxes on the upper class is correct and pragmatic.

Well yes, your ultimate economic growth, is dependent to a great degree on the speed with which you push out new "Towns". You need to develop all of your infrastructure. I set the arbitrary line at 10 provinces at which all "Towns" have emerged, as the point that you then shift to maximum tolerable taxes, and simply Exempt any new provinces that need to push out new "Towns". I see there is a huge confusion here, since those auxiliary build points are labeled as "Towns", while the primary income source (first listed in your city summary) is defined as "Town Wealth", yet is wholly independent of the actual "Towns" themselves, except for the fact that upgrading your various industries will give you increasing rates of "Town Wealth Growth".

Originally Posted by coman

In Monarchies and Constitutional Monarchies, economies grow in the upper class fairly well but are not vast and rapidly growing. Once you unlock other research and have a truly modern economy in a Republic this is no longer the case. When you have 150-200 region wealth growth per turn, you have to watch who you piss off.

It's actually not the case because a Republic has no Upper Class. Semantics are very important in a game whose rules are never made transparent to the user. Be that as it may, I understand what you are trying to say - but it's false. In my current game, in Stockholm, under a Republic, with tech almost maxed out, IF I exempt taxes, Town Wealth Growth is 119 (so I could see *maximal* Growth reaching 150, but that would only be while tax Exempt). With Middle Class taxes at minimum (5%), it drops to 105. Now, I get a 10% tax bonus to this single region due to government building (other provinces cap at 6% at most), so this single province with an income of 16000, if I leave both tax sliders at bottom (5% apiece) will reap 20% of that 58 - or an actual increase of 21 to my taxes at 20%. However, I can put my Middle Class Tax to 20% (1 from the max) without rebellion, which alone pushes taxes from 20%, to 35% (I also have Low Class Tax at 20% currently, but that's another story), yielding me another 2400 income. Yes - increasing taxes by 15% on 16000, gives me an additional 2400 every turn from this single region. But it gets better - my Town Wealth is still growing, even faster than the rate currently listed! At 4 on the bar, or 20%, I show 11 Town Wealth Growth - but in 3 turns it went up by ~100! Even if it totally stagnated (which 11 is close enough to stagnant), it would take decades for the growth to even hope to catch up to my current rate of taxation - but AT my current rate of taxation, I will have conquered the world before Town Wealth Growth could become relevant - THAT is the ultimate point. ((Town Wealth Growth in Stockholm at ~16500 income - Exempt:119, 5%:105, 10%:91, 15%:65, 20%:11, 25%:-47)) Now, the best part, is that in the 3 turns I watched closely, at 20% Middle Class tax (showing a Town Wealth Growth of 11) my Town Wealth actually grew by a total of 100.

Originally Posted by coman

Under Republics the upper class is extremely unhappy to be taxed. In early game and in AbMon's the upper class is your bread basket, milk money and paycheck. The game invariably drives you to a revolution, both socially and economically. It will eventually have to change, or you'll stagnate and hangfire like many economies in Europe in this period and later actually did.

I'm in year 1731, nearly all Enlightenment tech is researched (that which pisses off the Low Class - which btw, under CoMon, there is no Low Class, hmmmm), and nearly all Industrial techs that would piss off the Low Class are in place already as well (and I can manage 20% tax on the Low with only a couple of regions in the Yellow). But wait, what's that? Oh that's right - there is no technology that pisses off High/Middle class. That is to say, I have not been, and will not be under any increasing pressure to reduce taxes on the Middle Class. If Town Wealth would grow faster, or comprise a larger portion of the total economy, then there might be pressure, but there is none - you are simply hanging yourself if you keep your Upper/Middle class set to 5% for the entire game.

Originally Posted by coman

You misunderstand what I'm saying, so I agree you're not that bright.

The TOWN WEALTH is rolled into the REGION WEALTH. The "Town" as a concept is a slot that contributes to the Region. Double click a town, you get a building browser. Bring up the region and tooltip over the Region Wealth section and you'll see the contribution of the Town in the REGION WEALTH.

I had to paste this from the other thread, because it's actually the post that offended me enough to drag me out from my lurking. "Town Wealth" has nothing to do with "Towns", other than improvements built in them will give increasing rates of additional Town Wealth Growth. Region Wealth is a composite of all of these things - Town Wealth, Trade Goods, Ports, Mining, Industry, Farms, and Subsistence Farming. "Region Wealth" does not grow, outside of growing these sources, and "Town Wealth" averages somewhere around 15% of the total Region Wealth, from what I am seeing.

Just a reminder - it's obvious there is something flawed with this system, not only are the incentives for maximizing Town Wealth Growth through tax management nonexistent, but the numbers do not even give the results they display. At the end of the day, tooltips, developer intent, and assumed projections mean nothing - the only thing that matters, is how much money you have available to push your war machine.

BTW - what year was that screenshot that you posted from France? You have 36000 Trade Income, but only 6000% Tax Income. My Tax Income alone is aover 50000 now, with 11-12 regions under my control (including Iceland, what a sandbag!).

If you have any questions, feel free to hit me up. I'd love to see an actual mathematically supported rationality for caring about Town Wealth, but you'll have to understand what you're talking about before you can provide me with one.

**coman** · March 21, 2009, 04:12 PM