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PostPosted: Sat Oct 27, 2012 11:04 pm 

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Ticket prices appear to be rising rapidly with no clear end in sight for the month after month increases in price, but there are some warning signs and dangerous risks coming for speculators that might make ticket prices stabilize (stop increasing) or even crash. First, we all know that some sort of transfer or sales tax is coming for tickets that will replace the current income taxes on ticket sales. We don't know the details of how the tax will be implemented, or what rate ticket sales will be taxed, but it seems likely that there will be higher net taxes due for sales of tickets in the future. Since ticket purchases will no longer reduce taxes, there will not be any incentive to buy tickets to avoid taxes in the future, so demand for ticket purchases might decline as a result.

Right now, buying and then reselling tickets has zero net cost (you even avoid taxes while you are holding onto the tickets), but once the transfer tax is implemented, buying and reselling tickets will have a very real cost and you will have to see prices go up by more than the amount of this transfer or sales tax or you could easily end up losing money via buying and reselling tickets.

As an additional risk, it is worth noticing that more players are buying tickets, and if prices continue to rise, more ticket purchases with cash money are likely from new or existing players, creating an increase in likely ticket supplies at the same time as the transfer tax and loss of tax deductions for tickets will reduce likely future demand for tickets. Some large players have commented that if ticket prices reach 280 milion or 300 million in price, the credits cards will come out and tickets will start to be purchased in large numbers, because at those prices, it is just too tempting to sell tickets for increased game cash rather than buy tickets with surplus cash.

Finally, tickets are worth more than they cost to buy in game cash now, but there is a limit to the value of tickets, and at some point, it will no longer be worth upgrading to platinum if ticket prices increase too much. The value of tickets is not unlimited, and at some price, demand will dramatically decline, as players decide not to spend the extra tickets on upgrading from gold to platinum. Thus, it is never safe to assume that increasing prices for tickets have no upper limit and that prices can simply increase forever. They can't and they won't.


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PostPosted: Sun Oct 28, 2012 12:17 am 
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User avatarAindala Holdings
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It is a relevant issue.

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PostPosted: Sun Oct 28, 2012 1:30 am 

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User avatarUsa Product
THis applies to big companies only...If I had 150 factories It would take forever to go through and start...They could do without it, but it would take atleast 25 more minutes. ITs not going to be drastic, but your right demand will decrease. Stop attempting to scare ticket speculators please, this sales tax will not effect the simunomics ticket price in any way. Please post the sales tax relevant to taxes on this form...I want to see it, aswell as the other ticket speculators. This might increase the ticket price, people in order to make a profit will sell over the ticket sale price. They will actually raise in price, I am just being taxed, people need that gold,plat status...Thanks to the update ticket prices will raise, companies will and must compensate to the raise of tax...

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PostPosted: Sun Oct 28, 2012 10:34 pm 

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Ticket prices may have hit a peak at the 250 million level. I have 606 tickets offered for sale at 250 million, on the ticket market, and there are no buyers at that price. There are several other players who have offered tickets for sale for less, with some selling for 230 million on the auction market, and a few with the highest bid price at 200 million.

Long term, it is likely that prices will not fall back to the 200 million per ticket level that we have had for many months, but it is also not likely we will see a large jump to more than 250 million price anytime soon.

By offering a large number of tickets for sale at 250 million, my actions are clearly showing that I do not believe ticket prices will rise above that level anytime soon. It is not as if I need the cash from selling tickets, as you can clearly see from looking at statistics for top players in the game in cash rankings. I am offering them for sale because I believe prices won't go higher than 250 million in the near future.


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PostPosted: Wed Oct 31, 2012 7:21 pm 
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I believe this is an important topic, as well as the Bellerive article.


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PostPosted: Fri Nov 02, 2012 2:26 pm 

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Here's an idea. Can we just take ticket speculators out and shoot them all, and then divide up the tickets that they have horded with the rest of the game?


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PostPosted: Fri Nov 02, 2012 6:30 pm 

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User avatarReal Value
 
Nope. The speculators have self-destruct systems in place so if they are killed, all their tickets vanish with them. Won't work.


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PostPosted: Fri Nov 02, 2012 9:13 pm 

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What is the difference between someone who speculates on ticket prices and someone who invests on tickets?


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PostPosted: Fri Nov 02, 2012 10:21 pm 

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User avatarReal Value
 
The main difference is if you are buying the tickets, that is investing, but if someone else is buying the tickets, they are speculating.


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PostPosted: Sat Nov 03, 2012 12:20 am 
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Vaculus wrote:
What is the difference between someone who speculates on ticket prices and someone who invests on tickets?

Someone who seeks to raise prices of tickets in order to boost the value of their own stock would be a speculator. Those that, without trying to raise prices of tickets, simply buy tickets are investors.

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PostPosted: Mon Nov 05, 2012 12:32 am 

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I'm not sure if I am a speculator, because I bought tickets for a long, long time as investments at 200 million, in spite of some people during this time saying that I was paying too much for tickets and the price was being held up by me buying.

Now, I am trying to keep prices from rising too fast, and have been selling at 230 million, then 250 million, then 260 million, then 280 million, and finally now at 285 million each. My profits from selling a lot of tickets at these ever increasing prices are huge, especially since I only paid 200 million to buy them not so very long ago. I had over 7000 tickets in inventory as little as one month ago, and now, after the latest sales of tickets, I am down to only 800 tickets in Real Value Resouces and 2005 tickets in Real Value (plus the 1000 listed for sale on the market). I'm not out of tickets by any reasonable standard, but I am definitely getting lower in inventory levels fast now, with tickets selling faster as prices keep rising.

Seriously guys. Be careful. If I am selling, it is because I think prices are high enough and won't keep going up at this pace. I might be wrong, but I am definitely concerned about what will happen to ticket values when the new ticket transfer tax is introduced. In fact, I am worried enough about the transfer tax that I am willing to take the income now from selling tickets and pay the taxes now, because I don't think prices will keep rising once we have a new tax system, and in fact, it is possible that ticket prices will fall for the first time in a long time. Remember, people in America and other parts of the world thought that real estate would always go only one direction - up up and up - but that provided to be a huge mistake. Ticket prices can and possibly will go down. Speculation is very risky right now.


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PostPosted: Sun Nov 11, 2012 7:26 pm 

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Someone asked me today in a private message how will the new ticket tax work and what will be the effect of the new tax.

The best answer is, I don't know for sure, because admins have announced the general idea of what is coming, but not the details, so no one other than admins really know what is going to happen in that regard, and even they might not have worked out and agreed on all the details and specifics at this point.

We don't know when this will happen either. One comment from Admins was "faster than you might expect" which suggested to me days or weeks, but then again, fast for someone in the software development business sometimes means six months from now, so it is not really possible to know with any degree of confidence what "soon" means.

In terms of what will happen, we have some broad idea of what is coming based on what developers have stated already in the forums. The comments were brief, and it might be worth reading again what was actually said, but the main idea is that sales of tickets would no longer generate income, but would go directly to the balance sheet as equity contribution to the company (like issuing stock shares would do for a company), and buying tickets would reduce equity, but would have no income reduction from the ticket purchase.

Currently, the proceeds of selling tickets results in income, which is taxed. For the buyer, however, the purchase of tickets reduces income, so the buyer gets a credit against taxes owned as a reduction of income, which means tickets cost less than the price you pay because some of the cost is offset by a tax bill savings.

Soon, the former income tax on ticket sales will be replaced, instead, with a ticket sales tax (details and amount of tax not yet announced). That will probably result in about the same cost to the seller as the current income tax effect, but there will be no tax savings for the ticket buyer. However, nothing in what developers have stated gives any indication about the level of the tax that would be charged on ticket sales, and the tax could be significantly higher or lower than the current income tax cost that results from selling tickets. The only thing that appears to be fairly certain is that when this change is introduced, ticket buyers will no longer have a tax reduction on income tax that is payable as a result of buying tickets. Thus, one of the sources of value for buyers, the tax reduction benefit, will be gone. That change alone will probably make tickets less valuable to buyers, as the benefit of buying tickets will be significantly less immediately after this change that was the net overall benefit of buying tickets when the income tax reduction effect was still in place.


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PostPosted: Sun Nov 11, 2012 7:34 pm 

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User avatarReal Value
 
Here is the original post about the change that is coming for ticket sales accounting and tax implications:

Amarsir wrote:
As you may know, I never really liked how Tickets worked in the accounting system. I don't want them to count as real income or expenses, because that would make it hard to know how your company is actually performing. However, I don't like them as assets either because A) they pop into and out of existence when bought from or used with the system, and B) it's very hard to determine their fair value when being held.

Accurate accounting is important not only to show you how you are performing, but because it will be essential if we ever hope to have any kind of stock market for player companies.

Therefore, we're creating a special class of equity called Capital - Tickets, which will sit between Paid-in Capital and Retained Earnings. Tickets you own are still valued at 0. Ones purchased from the system or used up will be worth 0. However, every time you sell for cash, Capital - Tickets goes up. When you buy tickets from another player, Capital - Tickets goes down (and can be negative). This is a behavior similar to what you'd get from buying or selling shares of stock to the public, or if the owner of a business transfered cash in from his personal account.

As a result, ticket transactions will be completely removed from the income statement. By checking the Capital - Tickets line on your balance sheet, you'll be able to see in the long run how your money has flowed by trading them and compare it to the retained earnings which track actual profit and loss.

"Does this mean they're not taxed?" I hear you thinking. Yes, it does. However, we'll be adding a sizable per-transaction charge on tickets to make up for this. (This was mentioned a few months ago.) The goal of that fee is to A) compensate for lack of tax, B) pull cash out of circulation (which ultimately could reduce ticket prices and make their use more appealing), and C) create a cost to people who round-trip tickets as a sort of shady loan practice.

This fee would be taken from cash received immediately and therefore you wouldn't get hit with a tax bill for it later.

------------------------

We've corrected some bugs with accounting totals, mostly regarding auctions. Cash held in escrow on automatic auction bids will still be counted as cash until the auction ends. We've renamed the "Warehouse & Add-Ons" line to be "Other" because it also includes the value of your Transport Hub and might catch future building types as well.

-------------------------

The accounting statement view is being changed so that you can compare statements side-by-side and get change %s calculated for you. We also want to let you pick a line item (like Total Sales) and get a graph of it across all statements so you can easily see measurement over time, though this latter may be a Gold or Platinum level service.

-------------------------

We have decided to move toward removing all market fees (which would let you adjust prices consequence-free). This probably means the market system will get rewritten from scratch much like the mail did, so it's not an overnight change. But that's how we're headed.

Expect the accounting update sooner than you think, with an announcement on the front page. If you're wondering whether you should rush your ticket trading or hold off on them because one method favors you over another, I'd say you should behave as normally because the second the fee comes in the sales will stop counting toward tax. And yes, I'm aware I haven't told you what that fee rate will be. Just proceed as normal. :devil:


Here is the link to the above post on the forums

viewtopic.php?f=11&t=7380


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PostPosted: Wed Nov 14, 2012 11:22 pm 

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Boston
It looks to me like Real Value is trying to manipulate ticket prices somehow via this discussion. The only thing that is not clear is whether he is trying to get them to go down or up. It looks like he wants ticket prices to go down, but something tells me there is some hidden agenda here and all is not as it seems to be.


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PostPosted: Thu Nov 15, 2012 12:13 am 

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User avatarReal Value
 
Ticket prices are too high right now. The current price levels are not sustainable in my opinion, especially given the changes to tax that are going to be coming for tickets soon. I am selling tickets because I believe prices will go down soon.

This is simple. Of course, I will admit that I have said ticket prices were too high in the past, and I have been proven wrong.


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