The tax man cometh.
Its that time of year again again in the U.S. - Tax time!
After filling out my 1040, I started thinking about taxes in M2TW:
Is it better to lower taxes in a small city and make it grow so you can get more income later, or extract high taxes and stagnate growth with the possibility of having less income later.
IMPORTANT NOTE: The following applies to tax income only. Trade income is also based on population but this does not take it into consideration, as it would be extremely difficult and I am generally lazy.
First I found out how the game calculates taxes.
-'Normal Taxes' income = 421 + 0.0477 * Population, for other tax levels multiply the 'Normal' by: 0.8 for Low, 1.2 for High, 1.5 for Very High.
btw this was quite easy, I'm sure someone has posted it elsewhere. I only had to look at 3 cities.
Then I did a population growth simulation for various city populations (2000, 6000, 12000) with various 'natural' growth rates. For each case I assumed a constant growth rate (0%, 1%, 3% or 5%) which was adjusted by the +0.5%, 0%, -0.5%, -1.0% effects of changing the taxes. So for instance one of my experiments was a 2000 population city with 1% 'natural rate', and it had actual growth rates of 1.5% for Low, 1% for Normal, 0.5% for High, 0% for Very High. Next I did the 2000 pop city with 2% natural growth, or 2.5% for Low, 2% for normal, etc.
The findings actually surprised me so I am glad I did this little experiment
The actual results were much too complicated to fit in a post here. Although it took me relatively little time to come up with the results, it would probably take a 10 page report to fully explain them all, so I will very very briefly summarize:
The time for a large, fast-growing city with low taxes to make more tax money per turn than the same city with very high taxes was ~30 turns. For more normal cities actually found in the game, it was 50-80 turns. For small, slow growing cities it was 'after the end of the game'.
In conclusion, by the time your "low tax" cities grow to a size where they would make more money than if they had "very high taxes", you will have such a large empire that the tax income from an individual city will make little difference. In actuality, you need the most income as soon as possible, and so it is best to keep your cities on the highest tax level possible.
I will repeat this: I ignored trade income, which also depends on population. Also ignored were the effects of farm, town hall, etc upgrades which become available as higher populations are reached. I also completely ignored the negative growth/happiness effects of squalor. One cannot base the tax rate solely on the tax income alone. I was only examining a very small part of the total picture. The best method of succeeding still seems to be trial and error by actually playing the game. Take heart in the fact that due to the complete lack of the 'I' in AI, it doesn't really matter what you do, you will still win.
Winning by a crushing margin however, is still as fun as it has always been. I had hoped to possibly shed some new light on how best to do this, but seem to have failed. As a result, I conclude that this experiment was rather worthless in determining an overall strategy of adjusting taxes. I did have fun doing it however (I am a math geek what can I say), and that is what really matters.
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