Shadow Schools, or: Keeping the Kids off the Damned Street! Options

[Cthulhudreams]

Ares will want to recruit top sports players because studies show they are highly effective at things like investment banking.

[Fortune]

I see things like 'Megacorps don't pay taxes' and 'Megacorp employees pay taxes to the corp, not the government' and even 'X nation is flat broke' quite a bit, but nobody ever actually provides any quotes.

Very few of the actual Megacorporate facilities are actually considered extraterritorial. The bulk of their holdings are on sovereign soil. The same is true for the residences of the employees of those megacorporations.

I don't recall reading anything about employees not paying taxes to the nation in which they live anywhere in Shadowrun, but it's been a while since I have read the Corporate books. I also don't recall anything about megacorporations having blanket tax immunity either. Extraterritoriality has is benefits, but it also has a few restrictions on how and when it is implemented, and as far as I know, merely claiming AAA status does not mean they are now tax-exempt.

Please ... someone provide quotes to back up these claims.

[Cthulhudreams]

i'm presuming that extraterritoriality and citizenship of another nation works as it does now. I have not encountered any material in shadowrun that examines the taxation code either way, nor addresses the proporition of facilities that are extraterritorial.

However, for the provisions of the CrashCart etc NOT to go to extraterritorial areas to matter, the majority of areas would have to be extraterritorial, otherwise this would not be an issue in games.

And areas like the Renraku archeology - do seem to be extraterritorial.

Assuming that is the case:

http://www.google.com.au/url?sa=t&ct=r...MAtHzsbuBK0YM9A

Foreign embassies do not pay property taxes. Presumably, extrateritorial corps do not pay property taxes.

The US federal income tax is an increase case, but if you earn taxation overseas while being an Australia citizen, the oz government has no lien on that money, UNLESS you are an employee of the australian government working overseas, in case they do, but in either case, megacorp employees are immune

Is my foreign employment income exempt from tax?

Your foreign employment income is exempt from tax if:

* you are a resident of Australia

* you are engaged in continuous foreign service as an employee for 91 days or more, and

* your foreign earnings are not excluded from exemption by the following non-exemption conditions.

For example, a worker working in an MCT facility might be a UCAS resident and then meet the continuous foriegn service requirement. Atlnetatively, you might be a permant resident of a corp and own a holiday house in the 'foriegn country' of the UCAS.

As workers are routinely described as living in corp owned complexes, it is difficult to see why they would be UCAS residents.

The company tax question is actually the least debatable provision. They are DEFINATELY exempt from corp taxation.

Even if very few areas are tax free, it is still quite possible for the corps to 'herd' their tax liability to one place, much like microsoft does today with its tax burden. For example MCT headquaters in <tax free location> may license the MCT brand for 100% of the 'profit' that would be generated by MCT subsidiaries, so they make no money.

I'm just unable to work up a definition of 'extraterritorial' that makes sense given the parameters of 'can have private armies' 'extraterritoriality has a serious impact on things' 'corp citizenship' and 'stills pay full taxation'

[Fortune]

You seem to be attributing the bulk (if not all) megacorporate holdings with extraterritoriality. This is not the case though. There are certain requirements that must be met in order for any specific property to qualify for that status.

There is no need for every single facility to have this status though. As a case in point, Stuffer Shacks do not benefit from extraterritoriality, despite being openly owned by Aztechnology. Weapons World is a similar case even though Ares owns it lock, stock and barrel.

You are correct in saying that Renraku Arcology (or at least parts thereof) were considered to be extraterritorial. But that kind of environment is not the sole means in which megacorps operate. Not every employee lives in an arcology, or even in a corp-owned gated community (which may or may not qualify for extraterritoriality). I'm not even sure if the majority of corporate employees do, when considering all the subsidiary companies involved.

[Christian Lafay]

Upon hearing a rather loud BOOM from one of the lower classrooms the self-proclaimed head of the school began to run towards the sound. As he rounded the corner the door to Mr. Taylor Nathan Tucker's class opens slowly with both smoke and kids exiting. "Now remember the lesson of the day kids," Mr. "TNT" says from inside the class room. "Short burning chemical fuses look just like long burning chemical fuses. Enjoy your weekend."

[vladski]

Ares will want to recruit top sports players because studies show they are highly effective at things like investment banking.

Ares wants to recruit top sports players because they are highly effective at winning sports events and selling merchandise and Ares owns the team, advertises at the sporting events and it's GREAT PR.

Vlad

[Cthulhudreams]

You need many more bankers than you need teir 1 sports players (IMG:style_emoticons/default/wink.gif)

@Fortune

Fair point. So lets move to your model about extraterritoriality.

Even if only a small percentage of the highest value properties accommodating the top 1% of income earners - A number I feel is very reasonable, this is generally senior management and maybe the top end of middle management - and if AA and AAA corps account for 50% of business profit (not unreasonable either as the megacorps are vast I'm assuming AA and AAA account for pretty much the fortune 200, and is probably on the low side) government budgets would be down about 55% +/- 5%.

So they would be broke, because for the US government to achieve that they would need to cut ALL services except for medicare, social security and debt payments which account for about 53% (and remember they only have somewhere between 50 and 40%) of the federal government budget. Ie they would disband the entire public service and military, and the entire education system.

That is marginally less apocalpytic because they could just cut all social security and medicare and leave everything else, and instead run all their other services which would result in a very shadowrun world I guess.

[Fortune]

Debt repayments might well be moot, as the UCAS is not the USA or Canada, but a brand new country. As such, it may not be responsible for past debts. Shrug ... it's happened before.

I have no problem with welfare and Medicare being cut, and have not argued against that particular point.

I fully admit that most, if not all governments will not be as flush with capital or free with spending as they are now. I don't think they will be as destitute as you make it out to be though. With less liberal spending, and the private sector almost totally subsuming research (alleviating that drain on government spending), among other things that I'm sure are there, but because I am not as knowledgeable as I should be on the subject, I would be pulling from my ass, there should be enough to maintain a decent military and even a half-assed basic education system.

Especially with shrewd marketing and sponsorship deals. Recall the little blurbs in the 'ads' Street Sam's Guide and Fields of Fire about who is making what for which army.

[Leofski]

I'd be willing to bet that extraterritorial areas are leased from the home government, meaning that at the very least they pay a flat fee for the right to ignore laws. Some states may well follow different models though, for instance the PCC inspects extraterritiorial areas regularly, which suggest either taxation or that certain legal regulations must still be met.

Never forget that governments can still hassle anyone entering or leaving extraterritorial space, with SIN checks, body searches for smuggling etc and as a final move,at least some governments retaiin the right to expel megacorps from their territory, witness the PCC with Aztechnology. So they clearly aren't quite helpless in the relationship.

[CanRay]

Remember that only AA and AAA Corporations are Extraterritorial, as well. Smaller businesses still have to pay taxes.

[Zak]

You seem to be attributing the bulk (if not all) megacorporate holdings with extraterritoriality. This is not the case though. There are certain requirements that must be met in order for any specific property to qualify for that status.

There is no need for every single facility to have this status though. As a case in point, Stuffer Shacks do not benefit from extraterritoriality, despite being openly owned by Aztechnology. Weapons World is a similar case even though Ares owns it lock, stock and barrel.

What's your source on that?
My understanding always was that as soon as an AA or AAA label is on a company/facility it is extraterritorial. Stuffer Shack won't be a AA company, nor does it use the label Aztechnology's Stuffer Shack (making it a direct Aztec asset instead of a different company owned by Aztecnology)

I don't see why the big corps would want to pay more taxes than they really need to. They are supposed to be even more monstrous than todays big players, and actually getting those to pay taxes is a huge pain in the ass already without extraterritoriality.

[paws2sky]

All AAA corps are extraterritorial.

Not all AA corps are extraterritorial. Lone Star is, for instance, and its mentioned in a few places how big a deal that is.

No A corps (that I know of) are extraterritorial.


-paws

[CanRay]

I thought the point of fighting to become a AA-Corp was to get extraterritorial status...

Bah, gotta go through those books again. Got to find the NASCAR reference, too.

[Fortune]

Corporate Download and Corporate Shadowfiles have a lot of information on this (and I think one of the SotA books), but as I said earlier, it has been a while since I have had access to the Corporate books.

As I understand it, extraterritoriality is location-specific, not an automatic label attached to every single thing AA and above. For a facility or site to qualify for extraterritoriality it needs to be well-delineated as such, and be self-contained, either as a fenced or walled-off compound or an entire floor (or more) of a building. These restrictions are on top of any specific level of corporate activity ... all AAA corporations have extraterritoriality, but I seem to recall that the Corporate Court decides who among the lesser AA's that gain that advantage.

Megacorporate trucks and other shipping vehicles that are both clearly marked and sealed also qualify for extraterritorial status, but only while en-route between facilities.

[CanRay]

Ah, so an Ares Truck hauling Bare Metal between an Ares Smelter and an Ares Gun Factory is covered under the "Diplomatic Parcel" law, but an Ares Truck hauling guns from the same Factory to Weapon's World (Which is an Ares Subsidiary, but *NOT* large enough to be Extraterritorial) does not, eh?

Just to make sure I got that right.

And certainly isn't covered under those laws when you're hauling to Wang's Huge Gun.

[Fortune]

Actually, I think the truck in the second example would be covered until it reached its destination. The point being that only vehicles actually engaged in legitimate corporate activity (and meeting the other criteria) are considered extraterritorial. Hopping in an Ares semi parked at the side of the road does not automatically mean you have stepped on extraterritorial property in regards to escaping the Star and the like. If I recall correctly, it also means that the Ares truck, once hijacked (and hence no longer engaged in legitimate business practice) no longer qualifies for extraterritoriality until such time as it is reclaimed. Of course, this can get messy, but then again red tape makes the world go round.

Where's Nath? He's the expert on this stuff. (IMG:style_emoticons/default/smile.gif)

[Speed Wraith]

But to employ a teacher you need to actually pay a salary to someone who has a degree, and can presumably make significant money by working for a corp as a teacher at a private school or as a corp trainer.

It wouldn't be like the current situation - without income taxes from the top 20% of earners (megacorp citizens), payroll taxes, property taxes and company taxes (corps again), government budgets would require them to deliver 50-80% of the services on 20-30% of the money. Income taxes from the top 10% alone account for ~50% of the canadian budget, much the same across the world. These people leaving - which they have to work for the corps - would pretty much single handedly end government services across the world (the real reason no-one is ever going to let anyone have any sort of extraterritorial policy ;P)

To extend the classroom teaching model, a teacher would have a class of HUNDREDS at that level. Thats not school, thats lectures, except you don't have tutors to do the 1 to 1 stuff.

Giving everyone and trode net and saying 'welcome to tutorsoft 2.0 virtual teaching' actually has a incremental cost of 25 yens and is basically free by comparison. While its hard to make definitive statements, it seems so much cheaper that you wouldn't bother with actually having a building or teachers or anything for the unsustainable public schools.

Firstly, coming from a nation that has extraterritoriality: the policies do exist (IMG:style_emoticons/default/nyahnyah.gif) And using those as a reference I would make the guess that income earned on extraterritorial turf would be off-limits to any sort of income taxing. That would mean someone working on a project within an arcology wouldn't be taxed while someone on a different project working off of a non-ET site would. There is plenty of work off-site, especially in such a wireless world. Still, the point remains that education would be shorted significantly, which is why I mentioned corporate sponsorship (as did a few other posters). Yes, it is good corporate policy to spend the money on school-sponsorship. Not only do you get the pick of the litter in terms of potential smarts (despite low test scores, there are smart kids in the ghettos), physical attributes (even if they can't make the sports teams, maybe that big 8th grader would be great for a securtiy gig when he's done with high school) and of course, magicl talent. Plus you get to make some of those feel-good adverts with the sunrise going on and fluffy clouds in the sky and uplifting music playing while the corp tells Johnny Citizen about the good that they're doing and that by purchasing the corp's products they're giving some poor ork kid a chance to read and write. Finally, extraterritoriality in the sixth world probably does include a lot of requirements on behalf of the companies involved, some of that might be monetary, some might be simple requirements. Afterall, if all the government does is outsource everything, you'd think that they'd at least get some corporate contracts to enforce SLAs on the services the outsiders are providing. Failure to meet those SLAs means UCAS drags some evil mega-corp to court to have their ET status suspended, revoked, etc.

[CanRay]

Red Tape makes the world go 'round, and is one of the best weapons a 'Runner has that doesn't need ammo!

[Cthulhudreams]

If this 'hug a poor person' crap actually resulted in effective outcomes for private sector corporations they'd be out there right now sponsoring schools for the extremely poor people in backwaters. Except they don't, much preferring to strike at the university level after someone else has done the hard work.

It would be a huge waste of money and they'd get better ROI by offering uni scholarships to the people who make it. Which they do. It's the role of government - which has no profit motive - to offer schools for the disadvantaged. And they should damn straight do it (and they do, more effectively in some places than others), because it has big whole of society incentives.

Debt repayments might well be moot, as the UCAS is not the USA or Canada, but a brand new country. As such, it may not be responsible for past debts. Shrug ... it's happened before.

I have no problem with welfare and Medicare being cut, and have not argued against that particular point.

I fully admit that most, if not all governments will not be as flush with capital or free with spending as they are now. I don't think they will be as destitute as you make it out to be though. With less liberal spending, and the private sector almost totally subsuming research (alleviating that drain on government spending), among other things that I'm sure are there, but because I am not as knowledgeable as I should be on the subject, I would be pulling from my ass, there should be enough to maintain a decent military and even a half-assed basic education system.

Especially with shrewd marketing and sponsorship deals. Recall the little blurbs in the 'ads' Street Sam's Guide and Fields of Fire about who is making what for which army.

Well, if you cut all government spending on social security, health care, agriculture, transport, veterans benefits, pensions, and some other assorted junk (like research and anything to do with regulation of, say, environmental damage), you could keep the military, education, foreign affairs and justice.

(IMG:style_emoticons/default/biggrin.gif)

I mean, that would completely demolish the government as we know it, and remove all its biggest areas of responsibility aside from defense, but yes it would keep education and the military! Incidentally, not paying for R&D yourself just means you pay for it on the sticker price of guns you pay, but I've assumed you can fully cut it (which you cannot of course)

In my view they'd scale back equally across the board of course, which would mean that the education sector has to deliver for more people with 1/2 to a 1/4 as much money, implying average class sizes to 70 - 140, making tutorsofts the only logical option, but other distorted resolutions to the problem of plummeting revenues are certainly an option.

The number of people would be dying in the streets from things cholera in the proposed 'no healthcare or other services for poor people' model you have posited would certainly lead a dystopian feel. Keeping education probably won't help as they will drop out the first time they get ill - which will happen often as things like measles and mumps will be endemic in the population due to no vaccinations in the slums.

Other effects include business consolidation due to double taxation everyone except AA and AAAs with extraterritoriality only have to have gross profit margins 71% or better than other businesses as well, which will demolish any small businesses in very short order, leading to industry consolidation and further falls in tax revenues which will result in you having to find further fat to cut after disbanding most services completely. They will also attract all the best people as the top levels of AA and AAAs pay no income tax, but everyone else does, resulting in a brain drain to the AA and AAAs with extraterritoriality, improving their advantage further.

I guess at a fundamental level extraterritoriality is a total crock. I sound somewhat combative here, but it's mostly my disgust with how badly thought threw the concept is (IMG:style_emoticons/default/wink.gif) It really isn't very functionalm which is unfortunate as its essential to the setting.

[Fortune]

The concept may very well be poorly conceived, but it is what we have to work with. I am merely trying to find a reasonable way to put the square peg of education into the round hole of the Sixth World as described.

Incidentally, I did not posit ''no healthcare or other services for poor people"! I merely acknowledged that cuts would be seem to be inevitable.

I also have no problem with large classrooms supplemented with tutorsofts, but until your last post I was under the impression you were arguing against their use.

[Cthulhudreams]

Oh sorry, no, I was saying that given that you'd have to slash spending across the board, you need to come up with innovative education solutions.

That makes tutorsofts inevitable, supplemented by a 'lecture series' teaching model for the entire countries worth of kids at a time delivered by the 'trix. IMHO. I thought that arguement was clearly elucidated in post 58

The tutorsofts in SR are extremely powerful with very short horizons to achieving high skill levels, so I can certainly imagine that they would be popular corp or no. To the point where UCAS, CAS, the UK and every other world power would use them as a adjunct or even the primary method of teaching to the 3rd and 4th quartile of the population in terms of wealth.

Those would obviously have to be unbranded.

In which case we both seemingly agree with each other. You could probably even do that quite cheaply if you develop your gear inhouse. It will probably be more efficent to do that than license corp softs on a per seat basis.

Back to the economics.

The problem is that due to your reduced income that if you want to keep anything at modern levels, you pretty much have to completely abolish everything else. Using the conservative model for the changed tax model results in 40% of the current federal budget without considering things like

* The various trusts held by the US will have run out
* The adverse dependant:productive worker ratio is really going to be kicking the US in the teeth by 2070, particularly as orks coming through the system would otherwise reverse that trend are more likely to be sinless and poor. When you consider social welfare programs, the poor are tax netural.
* Consolidation in the business sector thanks to the megacorps.
* The books make out like the middle class is dead. If this is the case the entire system is dead, as poor people don't actually contribute any taxation to the system - they take out every cent as benefits they put in, as the wealthy will 'fly' to megacorp taxen havens, that leaves no-one to actually pay tax and the entire system collapses.

Conversely I'm ignoring state taxes - like sales taxes - and programs they run, like local infrastructure, which may come to your aid, but I think they will actually be worse off because they will loose payroll taxes which is a huge source of revenue.

So saying that the budget is 40% of current levels is a really, really generous estimate. The US has to pay 53% of its federal to maintain its current worst in the OECD healthcare and social safety net.

The US defense force takes over 20% of the current budget once you factor in things like the nuclear arms program. The US spends alot of money sure, but it has capability that no-one else has. You could jettison that capability, but that number isn't going to drop alot unless you cut like hell. Particularly if you keep the nukes and other bling. For example, if you where to cut that to 10%, you'd be down to australian levels of capability, ruling out nukes, nuclear anything, carrier battlegroups (Which are amazingly expensive) and all the other US force projection bling.

Education takes about 8%, and the public education system is again, one of the worst in the OECD.

So what you've got to do is maintain worst in OECD programs on 40% of current funding levels. That makes your unemployment benift about a week long, if that for example. Either you have to slash into the procedures that are covered by medicare, which doesn't help as its really simple programs like vaccinations and dentistry that make the biggest difference, or slash the amount that you pay - and as they are working poor they don't have any money anyway. If you keep the simple stuff you just right off anyone that gets anything resembling a complex disease, creating a cool 'reverse triage' where you kick people who have serious infections, major injuries from a car accident, been assaulted, cancer, heart disease etc out on the street to die like you were dealing with a nuclear explosion except every day.

It would effectively end society as we know it and cause a catastrophic backsliding towards other social models - fedualism for example.

Edit: An intresting counter argument not applicable for the 'many people flee and many sites are extraterritorial' is that you have to provide hugely fewer services. For example, all the assembly workers will fall under the Ares' health scheme, and AresVille needs to build its own damn roads, and you might be able to swing that.

[CanRay]

Chaos, carnage, destruction, gangs running the city, crime everywhere, the wealthy megacorporations held in safe and secure bunkered buildings while the rest of the people live in terror of the street monsters, police being underequipped and undersupported, and just general moral decay, in other words.

...

HEY! We just described Cyberpunk!

[Leofski]

The dependancy ratio is less of a problem then made out to be. Given the current legislative slide, using the UK as a reference, orks and trolls will almost never claim pensions, while elves and dwarves will speculatively still be working and hence not qualify for state pensions. You only need to worry about human elderly in terms of costs, which provides a significant saving.

I don't think the middle classes have been written out of the setting, in fact looking at books like arcology shutdown I'm pretty sure they're still around in force. The difference is that they are not generally setting relevant. Shadowrun as a game world focuses at the extremes of wealth and poverty within a system, shadowrunners aren't likely to have a huge impact on the lives of the middle classes.

[Cthulhudreams]

The dependancy ratio is less of a problem then made out to be. Given the current legislative slide, using the UK as a reference, orks and trolls will almost never claim pensions, while elves and dwarves will speculatively still be working and hence not qualify for state pensions. You only need to worry about human elderly in terms of costs, which provides a significant saving.

I don't think the middle classes have been written out of the setting, in fact looking at books like arcology shutdown I'm pretty sure they're still around in force. The difference is that they are not generally setting relevant. Shadowrun as a game world focuses at the extremes of wealth and poverty within a system, shadowrunners aren't likely to have a huge impact on the lives of the middle classes.

Yup, you can debate if the dependancy ratio is a problem, which is why I'm not really digging into it. I think it will be an issue, but I also subscribe to the belief that ork life spans are shorter in 2070 for the same reason that Australia Aboringial ones are today, because they live in extremely disadvantaged circumstances on average. However either way, orks and trolls being poor and dying early is actually bad rather than good. With their huge birthrate they could make your depenancy ratio AWESOME TASTIC and cause a GDP growth boom similar to irelands recently.

Middleclass: But thats corp ivory towers were they don't pay tax, which is much the same as being removed. It's probably an open question - but if the middle class is still as strong as it is today in say.. norway.. why do we even have such an unstable society? I think they have to have been servely damaged to generate the instability.

[Zak]

I don't think the middle classes have been written out of the setting, in fact looking at books like arcology shutdown I'm pretty sure they're still around in force. The difference is that they are not generally setting relevant. Shadowrun as a game world focuses at the extremes of wealth and poverty within a system, shadowrunners aren't likely to have a huge impact on the lives of the middle classes.

Writing out the classic middle class is exactly what SR did (and alot of current nations also manage to accomplish sadly). A decline in education will eventually purge the middle class as the discrepancy between those who are corporation material and those who don't qualify for anything but grunt work is getting bigger.
We can observe this happening at the moment and adding in the brain drain by megacorporations it will get worse.