Summary of What EVE Online's Tax Havens Teach Us About New York's Future - How Money Works

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The video explores how EVE Online's tax havens teach us about the future of New York's economy. The video discusses how a type of tax, the transaction tax, was increased from 2% to 5% and caused a race to the bottom in the market for citadels to serve as market exchanges. This led to the eventual downfall of those who attempted to impose a zero percent tax rate. The video also discusses how shooting down competitors' establishments is allowed in EVE, and how this can be used to force them out of business.

  • 00:00:00 The video explores how EVE Online's tax havens teach us about the future of New York's economy. The video first discusses how players in EVE Online need to work hard to make in-game money, and then goes on to discuss taxes that are paid by individual players and by corporations. The video explains how a type of tax, the transaction tax, was increased from 2% to 5% and caused a race to the bottom in the market for citadels to serve as market exchanges. This led to the eventual downfall of those who attempted to impose a zero percent tax rate. The video also discusses how shooting down competitors' establishments is allowed in EVE, and how this can be used to force them out of business.
  • 00:05:00 In this video, EVE Online's public trade hubs are compared to New York's current tax system. Both systems have advantages and disadvantages, but the real-world situation is much more complex than the video game. Capital flight (the process of wealthy individuals moving to more accommodating regions) is a major driver of economic instability, and governments are forced to take measures such as running budget deficits or taxation to keep residents in their jurisdiction. In the real world, high state income taxes are a major deterrent to wealthy residents moving to new Jersey, but moving from one state to another can be easy and tax-free. The video ends by noting that the real-world situation is much more complex than what is depicted in the video game, and that real-world governments would do well to take into account EVE Online's lessons when making decisions about taxation.

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