Why Does SIM Price Keep Falling?

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This morning I had the really bad inspiration to check out my dCity.

Here's what I saw:
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Let's put it into words too, just in case you are not curious enough to enlarge the screenshot.

101.9% total taxes

48% income tax
1% police tax
5% education tax
5% art tax
12.9% war tax
5% eco tax
5% jobs tax
20% basic tax

The current president applied all available taxes and reached and incredible 101.9% total taxes! This must be a first, a total tax over 100%?

But you may be wondering how I still get some SIM if taxes are, apparently, above 100%. Well, I have a Law Firm card, which reduces taxes by 10%. I never thought this card would become so valuable.

I wonder, what's the use of a president in the game, if his policy is to apply all taxes indiscriminatory?

How do smaller cities ever grow in such conditions (and I'm not talking about mine here)?

What these taxes are trying to prevent is this:
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The falling price of SIM, the in-game token of dCity.

But high taxes didn't work with the previous president, and surprise, higher taxes go even worse with the new president.

Let me tell you why this doesn't work, in case you haven't figured out yet:

  1. because who sells will keep selling, despite the high taxes limiting the daily SIM income, maybe with even more determination if they don't like the roadblocks (otherwise maybe they'd use a portion to reinvest)
  2. because there are better opportunities of earning elsewhere these days, that's why some sell, and that's why not enough people buy to compensate
  3. because you create FUD through taxes, which goes on top of the falling price.

I like dCity and I say these things precisely because I like it and I don't want it ruined by bad policies.

And just if you aren't aware of, the downtrend isn't happening only for SIM.

Here's DEC, the in-game token of Splinterlands:
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Here's STARBITS, the in-game token of Rising Star. Less pronounced downtrend, but still, going down recently.
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That doesn't mean there's something wrong with any of these games. As I see it, some are "cashing out", probably chasing higher returns that are available at the moment in non-games opportunities. When things cool down they will likely be back with even more capital (or not, if they lose it!).

== End rant. ==

Now that the rant if over, a hopefully funny disclaimer: I'm not the one selling.

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11 comments
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They gave us a heads up over in Discord late last year that this would be happening. If I recall correctly, in the next update, there will be some combination of cards that will help mitigate the increase in taxes. If my memory serves (and it could be wrong) the Law Firm card would be combined with others to achieve the effect. If anyone else knows more, please share.

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Most likely I wasn't around for the heads up (I joined late December). But even so, unless something is missing from my picture, this is the wrong approach to things and highly detrimental to small towns and their growth. I don't know if I should be happy that I invested in the game and have no longer such a small town or not.

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Daily income earnings is now so low, all I can afford from the market is homeless card x2 using SIM. I seldom sold, but now I sell constantly, rather earn 0.277HIVE from my measly 117SIM income. I have better things to do.

Posted via neoxian.city | The City of Neoxian

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I haven't sold anything yet - well, I try to sell double tech cards I receive, but not very lucky so far, and I don't want to drive the price down. On the other hand, I stopped checking my city often. Every few days is enough for me.

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We can change the price of SIM in USD value and the situation is not that bad as HIVE appreciated a lot in the past month. We need to take this in account that SIM did not appreciate as fast as Hive and there is a void for that. Also the last two presidents imposed very high taxes, which are counterproductive!

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We can change the price of SIM in USD value and the situation is not that bad as HIVE appreciated a lot in the past month.

Very good observation. I didn't take that into account.

Also the last two presidents imposed very high taxes, which are counterproductive!

Exactly.

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I know, we want to get out of the fiat system, but we need to have a real world comparison. We could peg SIM to gold value for example to see how it performed. :)

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I get the income tax is coded by gerber to be pegged to hive. But here we are in a case where this peg doesn't work. What would happen if Hive would skyrocket to $1 and maybe above in a short while with this pegging mechanism? How much would become the income tax trying to compensate?

Anyway, I'd prefer a better approach, but until we have it, maybe it wouldn't be such a bad idea that the coded pegging mechanism could be turned off at times to prevent anomalies. Or have a hard cap.

And one idea for @leofinance. Wouldn't it be great if we would be able to have comparative charts in USD, BTC, LEO(?) and maybe gold since you mentioned it? Maybe then people won't get worried if they see stability compared to USD or BTC, for instance.

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