FT 8-06: Commonwealth Budget for FY2019 (Passed)

[Fmr. Representative Encke]

I can weigh in here, since I did the FY2018 analysis.

The error in the math arises because of a rounding error; Truman used my rounded estimate (285.467 billion) as the revenue generated, when the exact value, adding up the individual contributions, was 287.5360052 billion. In any case, the error on most of these budgetary analyses is much higher than any rounding discrepancy.

I don't think The Mann Act and the Warren Act are invalid. They can simply be added to the FY2019 budget, since neither one makes any specification about when the funds should be appropriated.

[Fmr. Representative Encke]

Also, I see some discussion about the Carbon Tax in this thread, and I believe I've found the problem with it.

HenryWallace used this paper for his revenue estimate (which is worked into the text of FT 2-14), which I then transplanted into the FY2018 budget. The issue was not with the revenue estimate, which is technically correct, but with the bill itself, which lifts the tax described in the paper, but does not lower the corporate tax rate from 35 to 28 percent or allocate 161 billion for low-income individuals (both of which are elements of the carbon tax described in the paper). If those elements had been included in the legislation, the 10-year revenue would add up to less than 200 billion.

[Fmr. Representative Encke]

Also, I see some discussion about the Carbon Tax in this thread, and I believe I've found the problem with it.

HenryWallace used this paper for his revenue estimate (which is worked into the text of FT 2-14), which I then transplanted into the FY2018 budget. The issue was not with the revenue estimate, which is technically correct, but with the bill itself, which lifts the tax described in the paper, but does not lower the corporate tax rate from 35 to 28 percent or allocate 161 billion for low-income individuals (both of which are elements of the carbon tax described in the paper). If those elements had been included in the legislation, the 10-year revenue would add up to less than 200 billion.

The carbon tax rate was changed this year and cut by 40% FWIW since the revenues were literally greater than spending levels. Corporate taxes are a federal issue though in this case so that should have been left out but the funding of low income individuals should have been included. Of course, not sure what to do about it now.

So this has just drawn my attention to another issue: the figure that HenryWallace used in the original act (FT 2-14) is actually wrong (even disregarding the low income funding and other things) because it was not corrected for regional population. I'm partially at fault for this because Wallace asked me to check the brookings paper to make sure that his numbers were right, and I completely overlooked the fact that the paper, of course, was for a federal carbon tax.

So the value reported in FY2018 is wrong by roughly a factor of three. At this point it doesn't make much of a difference because of the huge surplus from the previous year, so it wasn't like we were spending money that we didn't have. But that is definitely an issue that I'll fix in this year's budget.

[Fmr. Representative Encke]

Also this law is in effect

https://uselectionatlas.org/AFEWIKI/index.php/Preventing_Atlasian_Anti-Choice_Coercion_Act

Yes, YE addressed that:

Looking through older stuff, I stumble upon two bills that were signed prior to the signing of the FY2018 Budget yet not included in the final bill.

Warren Act: $618,750,000 - one time thing
Mann Act: $300,000,000,000 - one time thing

None of these were actually included in the FY2018 so I'm not sure if they're legally funded programs.

I also think I found an error in the math of the FY2018 budget (not counting for the above two items). I am getting $804,529,005,200 in revenue, $426,628,500,000 in spending,  leading to a surplus of $377,900,505,200.

This still is unresolved:

Other bills that also go in this category:
Preventing Atlasian Anti-Choice Act: $600,000,000

This I'd assume would come directly out of the infrastructure fund:
Fremont Railway and Pan-Regional Transport Act: $4,618,000,000

All except for the one above should have been included in FY2018 but were not explicitly mentioned in the 2018 bill so not sure if these are valid.

So yeah, this is why I've been skeptical of too much spending as it is as we could have a surplus of about $75 billion or something much greater than that. I was intending to take care of this at the end of the budget process but seeing as I did the budget framework months ago and know the ins and outs and my term as FM as ending in a few weeks, we need to settle this now.

[Fmr. Representative Encke]

Just wanted to say that I am working on the Fremont budget now. It should be done in a few days.

[Fmr. Representative Encke]

Alright, I've done the lion's share of the budget and I should be done/have the results posted by tomorrow (or at the very latest, Saturday). Some bits were rather frustrating to find good statistics for so they took longer than expected.

I've also learned that I shouldn't trust cost estimates presented by MPs when advocating for their bills. For the Green Vehicle Promotion Act of 2017, I used the information that Tirnam presented in his advocacy for the bill, and didn't realize that, as usual, the regional population multiplier had been neglected. So, the revenue for that, like the Carbon Tax, was reported as between 3 and 4 times what it should have been in the FY2018 budget. These errors will have to be subtracted from the FY2018 surplus in the 2019 budget.

[Fmr. Representative Encke]

Also, I found an issue with FT 8-18 (2018 Royalties). This bill uses

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as a basis for amendment. However, the original bill, here, had an amendment adopted, quoted below:

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So the 2018 act amended a version of the original act that was never passed.

[Fmr. Representative Encke]

That’s my fault for not looking at the wiki and assuming the speaker updated the OP for amendments. Technically though the 2018 bill overrides it anyway though, correct?

Yeah. The issue doesn't really affect the budget too much (and in fact the 2018 act makes my life a lot easier because I don't have to deal with percentages), it's just that the act was passed based on a false premise and I thought y'all should be aware.

[Fmr. Representative Encke]

Upon closer inspection, the 2018 Royalties Act does probably need a modification. The FE-3 amendment to the 2016 Royalties Act changed the tax to 10% per THOUSAND cubic feet. With natural gas prices hovering around $4.00/thousand cubic feet, this would amount to roughly a $0.40 tax per thousand cubic feet.

However, a $2.50 tax per cubic foot, as described in FT 8-18, would be a $2500!!!! tax per thousand cubic feet.

Hmmmm...

[Fmr. Representative Encke]

Upon closer inspection, the 2018 Royalties Act does probably needs a modification. The FE-3 amendment to the 2016 Royalties Act changed the tax to 10% per THOUSAND cubic feet. With natural gas prices hovering around $4.00/thousand cubic feet, this would amount to roughly a $0.40 tax per thousand cubic feet.

However, a $2.50 tax per cubic foot, as described in FT 8-18, would be a $2500!!!! tax per thousand cubic feet.

Hmmmm...

Ok, will reduce that (and suspend the rules to do so) by a bit since that’s obviously ridiculous.

Yeah, probably a good idea, since a straight calculation of the revenue for a $2500/1000 m^3 tax results in a figure of 12 trillion dollars.

Also going to add that the Coal tax was supposed to be a reduction from 110$ to 50$, but since the actual 2016 Royalties Act had a 50% per ton tax, the 'reduction' in the 2018 act actually increased the tax (since the price per ton of coal is around 40$). This will need to be fixed as well.

(Meanwhile, the oil tax is all right, with the revenue numbers being roughly double those of last year, which follows the intention of FT 8-18)

[Fmr. Representative Encke]

Now a comment on FT 7-17 (the Fremont Drug Tolerance and Prevention Act):

From the Act:

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Section 3 mentions possession, use and sale only. Doesn't this mean that manufacture is still illegal? As such, I don't see how it would be possible to tax retailers for a product that they are obtaining illegally. If the intention was to decriminalize the drugs outlined in Section 2, then sale should be removed, and if the intention was to legalize them, then 'manufacture' should be added.

Anyhow, a cost analysis of this will be extremely difficult anyway either way.

Also (and I may be mistaken  about this), but the other, one-time portions of FT 7-17 were not added to the expenditures portion of the budget:

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[Fmr. Representative Encke]

Alright, I've done everything except the Drug Tax (there isn't really a good way to do an estimate for this since we don't know how legalization will affect consumption) and the Gaming Tax (I'm working on this one, but it might take a while).

Here's the spreadsheet with some details and sources:
https://docs.google.com/spreadsheets/d/1Ls1tNRgYMFqwRDdPF_MwyMc5CHOOrqzNi5FDlPWEwb4/edit?usp=sharing

[Fmr. Representative Encke]

Amendment:

Amendment (just adding the new taxes in - basically a procedural amendment):

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Bumping this because I'm about to introduce an amendment.

Actually there's only one bill for sure that I needed to add lol since everything else more recent counts for FY2020.

Edit: I missed a few bills in the Truman ministry holy sh*t. Added.

[Fmr. Representative Encke]

Eckne, do the carbon tax numbers account for the re-appeal of the 2018 tax hike, which was based on misinformation, or no?

Yes. I used the original 2017 bill. (also, the 2018 tax hike wasn't a hike, the original bill had $20 per ton of carbon, while the 2018 bill dropped that to $12 after an amendment)

[Fmr. Representative Encke]

Although it might be beneficial to amend the 2017 bill as well, since there is a section that explicitly provides an incorrect revenue estimate that wasn't population-corrected at the time.

[Fmr. Representative Encke]

Okay, thanks.

First off, going to add the drug research stuff I forgot to add earlier, and fix the TILE act, as only $405M is appropriated annually. I will also add funding for the Mann and Warren Act, which will be spent via the infrastructure and subsides fund in the 2018 budget until that is used up, with the left overs being spent on this budget.

Just found an additional mistake. The GREEN ACT allocates 80,000,000,000 over four years, so the amount in the budget should be 20,000,000,000.

[Fmr. Representative Encke]

Alright, finished the gaming tax numbers. These can be found in detail on the spreadsheet. Revenue is $5,100,495,700.

[Fmr. Representative Encke]

Finished drug act cost analysis for the marijuana tax. Revenue is 2,946,083,796. The post in the GM's office will be updated accordingly.

Unfortunately, I will be unable to do a detailed cost analysis for the other drugs, as there are practically no statistics about their cost or consumption per capita. However, it will clearly produce far less revenue than the marijuana tax, and based off of some survey numbers that I've found, the revenue generated would probably be under less than one fifth the marijuana numbers. This will probably be a statistic that the GM department will have to 'make up' in the future, so I'll just throw out a figure of 500,000,000 (willing to listen to any objections to that number).

[Fmr. Representative Encke]

Although it might be beneficial to amend the 2017 bill as well, since there is a section that explicitly provides an incorrect revenue estimate that wasn't population-corrected at the time.

That's probably a good idea for record keeping purposes. Post the necessary corrections and I'll introduce a bill although I won't suspend the rules since it's not something that needs to be done now.

Sorry, didn't see this.

The original bill specified an initial 112.5 billion dollar revenue.
Correcting for regional population, the initial revenue should be almost exactly 30 billion dollars.

So:

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