We NEED taxes

Good idea, you would have to decide what value to use as the current exchange rate. If you use the last trade, people can easily game the system by buying one block of $L at a horrible price, just to get something expensive for cheaper with all their $L. If you use average for the day, people could do the same thing at midnight. You might be able to use a moving average that looks at the last 24 hours instead of resetting at one time everyday. Unfortunately, I think major changes to the API, means major work, though. Major work seems to mean less chance of it happening.

When you tax something, you get less of it.

If you believe there are too many transactions going on, then by all means, impose a tax and cut the amount of economic activity. Boy, that'll prop up the $L. (NOT.)

Buster

Yes. It is much more fair, and it's not rediculous at all because

1) people who are concerned about the inflation should be the ones who pay the price in order to fix it. Not those who seek no benefit at all from exchange. That would be like taxing you so that we can all have free cheeze. Even though you are lactos intollerant.

2) The same people who use the service to exchange money are the same people who are complaining about inflation. I don't hear consumers complaining because as the linden goes down in value they can usually find thier items at the same price. what a deal for them! It's the business people and developers who are suffering, so they should be the ones to fix the problem, or pay to have the problem fixed. It's WRONG to force people who don't care about a problem to pay to have it fixed.

3)there is going to be a surcharge none the less, wheather you call it a method of tax, or wheather you call it cost of using the service. May as well use the lindens which are comming in to lower the output of new lindens needed for stipends and what have you.



Yes exactly, and people will gladly pay the cost of the item which includes the cost of exchanging money AS they buy the things they want. But they will not agree to paying an outright tax on ALL money weather or not it is being used in an exchange or not. For instance perhaps something being sold or traded is not going to end up on an exchange. Something between friends perhaps. There is no justificaiton for them having to contribute towards the eleviation of inflation. However when we chose to purchace from a store run by someone supporting himself on his SL business, then it is justified for the prices to include the exchange costs. It's balanced and makes perfect since.



It would definately be cool, however what if I want to start my own exchange? Would my system be able to incorporate itself with the vendor API, or would we be stuck with only the possibility of the Linden exchange and G.O.M. ?

I am not an economist but even with my minimal understanding, neither increasing taxes nor Shaun's above idea would work. Let's look at these separately:

1. Taxes: this will only limit the growth of the economy, will make people think twice about their activities or puchases, will make SL an "unfun" place and as the economy goes down so does the value of L$. In a way, this would have a reverse effect. I can get into much detail RL economics on this issue but I will leave it at this, Taxes NO NO!

2. Shaun's idea to reprice items based on L$ exchange value: This is really pointless for the effort to be spend to implement it. Because, this is the same thing as LL abolishing L$ and instead switching to US$ for all transactions. So you pay 1 US$ to buy your item, so there would be no such problem as value of L$. This of course creates variety of problems for LL, as they can no longer "print" money as they are now. They can no longer claim L$ has no value.

There really is only one way to stabilize the value of L$, that is LL have to stop "printing" money for nothing! So, basically they need to set up a real currency exchange, perhaps act as a central bank. I believe LL by forming their own exchange system moving towards that goal. I can forsee, eventually they will begin also selling L$ for a fixed dollar amount or perhaps even auction it as lands. However, for that to occur, they will have to stop all the "free money" flowing into the system (i.e. any money besides the weekly wages for premium accounts, who are in effect paying for those with their montly subscription). Again LL has began to do that, which will also have a near term effect to limit the supply of L$ to the economy.

The problem is, SL has not yet reached a critical mass to be self sustaining and does not yet have any RL money or property protection laws, banks, stock market etc. As such, the value of L$ is illusionary at best and it is a fallacy to think it will behave as RL money.

I'm not going to touch the original issue since I'm suspicious that Jamie threw the hand grenade to see what kind of reaction he could get...

but I would note that people have a knee-jerk reaction to the term "taxes". As Eboni said, you can call tier payments a tax if you want. You can call our image upload fees a tax if you want. In essence they are the same thing. It's just LL's pricing schemes and L$ money sink structures...

What’s in a name?
That which we call a rose
by any other name would smell as sweet


lol, well we all know how the word "taxes" smells rofl

Naw, really?

Nobody would ever do that in the forums.

LOL, well LF has more willingness than I do to just out and out call a post a supernatural creature of Scandinavian folklore, variously portrayed as a friendly or mischievous dwarf or as a giant, that lives in caves, in the hills, or under bridges.

Yeah I think some sort of moving average would be the way to go. If the API also placed automatic orders for you to sell your L$ at the rate it gave your customer it would also (theoretically, god knows what would really happen) have the nice side-effect of smoothing that out somewhat.



I was thinking more along the lines of an LSL API that worked via link messages. A resident could create this and vendor makers could install it if they like.

shaun, i believe hiro was also talking about this concept as well if you want someone else to brainstorm with

I'd be glad to pay a tax if it were fair and balanced. I wouldn't be happy paying an unbalanced L$ exchange tax though, unless it cost LESS than GOM costs now, as I'd rather AVOID passing those costs on to my customers in the form of more expensive land.



I'd imagine that any exchange who wanted to talk to it would be able to, and content sellers would just pick their favorite exchange to price their items for them.

Why not just have a group of ppl get together and make a bunch of confusing and arbitrary rules and rates for a tax system, then force everyone to pay weekly out of their stipends, but once a year they fill out this form and either owe more or get some back.....

I'll help you all fill out those forms.

Why would the fact that my favorite L$ exchange is talking to my vendors to price my items dynamically have any effect on LL at all? I don't see why this would "cause them problems" or force them to "stop printing money" based on the fact that my items are now priced by my favorite exchange's current L$/USD quote rather than manually by me. I think you misunderstood my suggestion. I wasn't really suggesting this as an LL feature, although LL's exchange could talk to the API too if it wanted to.

I was suggesting a resident pioneered system, started by a resident run exchange. It seems like it'd be a great value-add feature for GOM if they wanted to do it. Or, maybe some new exchange could pop up who offers it. As long as all exchanges can send prices in, and end users can pick their favorite one to give their vendor quotes and have their vendor send L$ to.

Better still, maybe each exchange who wanted to could offer their OWN vendor that talked to their exchange, rather than someone making an API.

I propose a GOM tax. Let those who actually care about the economy and make money off of SL bear the burden of stabilizing the linden dollar
You can pass on the costs to consumers, further increasing the L$ rates.

Taxes? Yuck!

Why not start allowing tier fees to be paid in $L? It would both take money out of the system, and stabilize the $L value, by creating a “official” conversion rate.

But honestly, I am no economist... so I could be way off base.

Ahh, ok you are right I did misunderstood. I thought you were proposing a universal mechanism by LL to do this. If what you are suggesting is resident pioneered of course it's worth trying. The only problem you may run into is that your prices may become too expensive if the value drops, assuming other vendors don't follow the same route. This is basically what people used to do in countries where there was hyperinflation, while it didnt help reduce the inflation (actually contributed to it), it did help the merchants to survive.

No.

I think that taxes are bad. How can you enforce them only on the "traders"? It is an all or nothing for tax. Other sinks will come, some sources will be reduced. In the end it will all become balanced. In the end, it is all just equal to nothing.

Yes that is true. The risk someone using the vendor system would take is that if customers don't feel like your product is worth that equivelant of USD, they won't buy your product. One of the big reasons why the bottom is falling out of the L$ right now COULD simply be that people aren't finding enough COOL STUFF that they feel compelled to buy in the first place, so they don't buy L$ to buy the cool stuff. We must always remember that the L$ isn't really a currency, its just a proxy for currency. No bank will change our L$.



Yes, one thing that is for certain is that anyone who cares about L$:USD conversion ratios should be in survival mode right now while we wait to see what's in store for us next on the L$ front!

Taxes are just fees you pay to live in or do business in a country, or to hold certain citizenship rights in a country you may or may not live in.

Inflation is a tax on money.

The inflationary nature of the $L is just an added fee by LL labs. Charged, albeit unintentionally, to the holders of $L.

The only way for the $L to become non-inflationary would be for LL to either reduce the $L's it's printing into the system, or to buy $L's back out of the system from an exchange like GOM, or out of their own exchange when they get it up and running.

Which is basically what the Fed does. The Fed controls the money supply by bond issuance--when they print new money, it gets into the system when they use that printed money with the ink still wet on it to buy back government bonds.

If the goods and services, the ones desireable to the consumer, shuffling around in the economy grow, if you *don't* increase the money supply accordingly, then you cause *deflation*. When LL introduces more "land" into the system (provided there are buyers), when they sign up more users who then have a demand for $L to buy goods and services (making more of the goods and services for sale "desireable"*** and making them sell--increasing the GNP), then they are introducing real wealth into the system. From an SL perspective, customers are added wealth. New Basic Accounts are a deflationary pressure on the $L as new users spend more than their allowance and buy the extra as-needed from GOM.

The only ways to stabilize the $L are to attract more Basic users and entice them to spend money buying $L to spend in SL or to use real money to buy back however many $L it takes to bring the desired amount of stability to the Linden. Of course, doing that is not free. LL would likely have to raise some rates for some of its services/access amounts.

Either way, the consumer pays it. Unavoidably. Either we pay it through inflation, as a general tax on all holders of $L, or we pay it as a fee increase on goods and services. All LL can do is try to tweak *which* customers pay it. Whose fees does it raise? Can it attract more Basic customers and entice them to spend real money in SL? Inflation *may* be the least painful way to pay the freight.

When you think about it, each time a newbie with a basic account goes to GOM and buys some $L, it's money in LL's pocket, because it helps stabilize the Linden--which means they don't have to spend real money doing it themselves to keep their customers happy.

I'm a newb. With a basic account. Who buys $L from GOM as needed, so far. I heard about SL by word of mouth.

You guys don't need taxes. You just need better advertising.

BlueWillow

***So many of the goods being infinitely duplicable, without even the overhead of CD or DVD media, it changes the economics of "real wealth" from those in RL. Also, effectively the only hard resource limit is servers and their support---no water issues, no oil issues, no food, no mass to ship, etc. More land and prims and processor time is real wealth to match up with Lindens. Increased desire for goods and services is just another way of saying increased demand--increased demand props up prices and props up the value of the Linden. Increased demand for goods and services just means the SL economy has grown. To stay at a stable price level, the money supply has to grow (or shrink) evenly with the economy.