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Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

by Neo_Novalis
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Original Post

[Suggestion] Introducing a progressive tax scheme to the MUT auction house

[ Edited ]

I definitely support the concept of refining the MUT auction house as it has been announced on June 25th 2021. From my perspective, an overhaul of the auction house is very important to avoid that cheaters exploit the auction house causing harm to all MUT players who want to play straight and fair. In addition, I’d like to suggest …

 

  1. the introduction of a progressive tax system instead of the currently applied flat tax (of 10%) for successful auctions in the MUT auction house.
  2. adding alternative modes or revising existing Solo modes allowing repeatedly playing with your MUT team while earning rewards (e.g. an additional MUT Solo Season mode, a revision of Solo Battles and Solo Challenges). I already posted some of my thoughts about a MUT Solo Season mode and how to improve Solo Battles and would like to write about my suggestions on Solo Challenges soon too.
  3. replacing the concept of NAT items (which remain NAT all the time) by a cooldown phase for auctioned (or bought) items, traded items and items received as Solo Challenge rewards (in other words, they are NAT only temporarily):
    • bought items from the auction house can only be offered for sale / auction after one week again.
    • traded items can only be offered for sale / auction after one month again.
    • items (incl. collectibles) received as rewards from completing Solo Challenges (which have been NAT in previous Madden versions) are treated as if they have been received via a trade.

What goals do I want to achieve with these suggestions?

  • Improve the fun of playing MUT for all players by allowing to sell traded again and make use of promo items if they (or other set items of the promo) are not interesting for you (and/or your theme team).
  • Decrease incentives of cheating via using secondary accounts or buying and distributing coins.
  • Reduce the negative effects of arbitrage in the auction house (I will explain the concept of arbitrage below).

I will not go into detail regarding part 2) of my suggestion since I already made some suggestions in the AHQ and the EA Madden forums. These suggestions are important complements to my suggestion because I think that players should have the chance to earn as many rewards and coins via playing depending on the time they are willing to invest into this game. Some more of my thoughts about the lack of opportunities to earn coins in Madden (except H2H modes) can be found here.

 

Regarding point 3), from my perspective this is an important feature to allow players enjoying the full range the MUT mode can offer. I love MUT because it is about enjoying a football game combined with collecting rewards, exchanging items with other players and completing sets to steadily improve your team (while I’m not interested in competing with other players). If a huge number of (promo-related) items to be gained through playing Solo Challenges cannot be used in trades or auctions, a lot of fun of the MUT mode is lost. I know that there are good reasons why this concept of NAT items had been introduced. There are just too many players who exploited opportunities which had not been targeted by the creators of this mode. For me, it is not a question whether exploiting these opportunities should be called cheating (as long as they have not been explicitly forbidden by specific rules) or whether it is just cleverness. It is more a question how the exploitation of these opportunities affects those players who just play the mode as it was intended by design.

 

In order to fulfil both functions, 1) allowing trades and auctions for all items, and 2) avoiding exploits of secondary accounts or coin distribution, I would like to propose a weakened form of the NAT concept. Players should be allowed to sell all items after a cooldown phase. In case of a traded item or an item which is rewarded via Solo Challenges, the cooldown phase should last about a month. In case of bought items (i.e. from the auction house), it should be about 1 week.

 

Why do I think a cooldown phase is necessary?

First, secondary accounts should not be attractive in terms of shifting promo (or other) rewards from one (ore even more) secondary account(s) to the primary account to easily complete promo sets. If a player buys coins or receives coins from other players or accounts without providing anything of comparable value in-game (but maybe receives or pays real-world money instead), (s)he acquires an unfair advantage over other players. Doing that might be illegal in some countries as well. If these items could be shifted from one account to another after a month only, it is not worth anymore to invest the time of playing in a secondary account (because the value of an item drops significantly as better items are released in the meantime). Instead, it should be allowed to play with your primary account as often as you want (that’s why we need additional Solo modes aka point 2)). In addition, if traded items cannot be sold immediately, it is much less attractive to transfer high value items from the secondary to the primary account because – again – the value of items strongly decreases as soon as other items (with higher OVR) are released. Second, buying coins is much more difficult if players could not trade items or sell them cheaply from A to B before transferring a large number of coins from A to B by rebuying the item again. I will come back to this point a bit later again.

 

Third, a cooldown phase would reduce the incentives of exploiting arbitrage in the auction house from buying items cheaply and selling them expensively. In principle, there is nothing wrong with someone buying products cheaply and then selling them more expensively if they perform for that price difference. For instance, in the real-world retailers buy products from suppliers to provide the products to customers where they need it. In other words, they provide the service of distributing products or shipping them from the place where the product has been produced to the place where it is demanded. This service is refunded by a higher price they charge when selling the products. The important difference between retail and arbitrage is, that in the latter case the trader does not provide any added value to the customer. The arbitrage using trader only exploits price differences without providing any service. As well as it is considered harmful in economic theory, it also harms those MUT players who end up buying the item for a higher price.

 

How does the suggested progressive tax model look in detail?

The core part of my suggestion is a progressive tax (i.e. auction fee) which should replace the flat tax (10%) as it is at the moment. In order to illustrate the concept of a progressive tax scheme, I created graphs and tables for 2 exemplary cases. They show the amount of taxes to be paid as well as the net revenues (shown on the y-axes) to be earned for an item of a specific quicksell value (in the examples I used a quicksell value of 500 and one of 50,000 respectively) depending on the price (shown on the x-axis) and compare the progressive tax scheme with the current flat tax of 10 percent.

 

The main idea behind a progressive tax is that the marginal tax rate (i.e. the tax rate you have to pay for a price increase of an additional coin depending on the price) increases with higher prices. While you do not pay any taxes for the first coin you earn from the sale, a mediocre tax rate is applied for an additional coin for a average price and a very high tax rate is applied for an additional coin at a very high price. I’d like to explain this concept by splitting the first example into pieces (see also the attached tables).

In the model I’ve chosen, a player does not have to pay any taxes if the price is zero (tier 0 in the table) and as long as the price is either lower than the quicksell value (in training) or – if the quicksell value (qv) is smaller than 500 – it is lower than 500 coins (tier 2) in the table). If the price is between 500 (= 1*qv) and 2.5k (= 5*qv), a marginal tax rate of 0.5% is applied (tier 3). This means that the total tax increases by 0.5% * 2,000 (= 2,500 – 500 because the value of 500 coins is tax-free). The total tax of an item (with qv = 500) which is sold for 2,500 coins would be 10 coins (or 0.4% of the price). If the price is between 2,500 and 5,000 (= 10*qv), a marginal tax rate of 1% is applied (tier 4). Again, to calculate the total tax amount, we firstly deduct the 2,500 from the full price of 5,000 (because for this amount a lower tax rate has been used). From the remaining 2,500 coins, a marginal tax rate of 1% results in additional taxes of 25 coins. In total, adding the 10 coins from before, the total tax for selling the item for 5,000 coins would equal 35 coins (which is much lower than if we applied the flat tax of 10% => 500 coins). The additional tax tiers follow the same concept. We deduct the previously considered amount to calculate the additional marginal tax when applying the tax rate of the next tier respectively. Using a formular, the total tax (depending on the price could look like:

 

Total tax = 0 * (500 – 0) + 0.5 * (2,500 – 500) + 1 * (5,000 – 2,500) * 2.5 * (10,000 – 5,000) + …

            ~ marginal tax rate(tier 1) * (upper bound(tier 1) – lower bound(tier 1)) + …

 

Tax rates and upper and lower bounds of each tier (i.e. the parameters) can be chosen as desired or meaningful for the overall auctioning system. I could also imagine that the parameters might be adjusted during a MUT season (e.g. when a new series is released) to adjust for decreasing prices of early released items. In my examples I tried to choose the parameters to have a similar average tax rate for reasonable prices as it would be if a 10% flat tax rate is applied. The only important thing is that the marginal tax rate increases (or at least does not decrease) with higher tax tiers. Calculating the tax tier-wise (and not as a direct function of the price) prohibits that the seller always increases his net revenues as long as the price increases, but on the other hand the increase becomes smaller and smaller the higher the price already is.

 

In my examples, both tax schemes (the flat tax and the progressive tax) would result in about the same average tax in tier 10. This would equal a price of about 30,000-35,000 coins for an item with a quicksell value lower or equal than 500 (because I defined the tax-free first tier as 0-500) and about 3-3.5 Mio coins for an item with a quicksell value of 50,000 training. If the items are sold for a lower price than the respective benchmarks, the progressive tax scheme would result in higher net revenues for the seller if compared to the net revenues resulting from the current flat-tax of 10%. If the price is higher than the benchmark, the seller would be better off with the current flat-tax model.

 

Why do I think that a progressive tax scheme would be beneficial for the MUT auction house?

First, a progressive tax scheme would reward those who sell their items at a fair price, or – in case that (s)he has unintentionally set a price too low – (s)he would at least have to pay only a fairly small amount of additional tax. Second, the progressive tax scheme would punish greedy players who sell their items for horrendous prices when compared with the quicksell value. Third, punishing sales for horrendous prices would also make coin selling much more difficult because the seller would either have to accept a huge loss of coins due to a very high tax rate (if low-value items are sold for millions of coins) or the selling process would require either making use of high-value items (to reduce the marginal tax rate for high prices) or repeatedly sell low-value items (for a comparably high price but with an acceptable – from the perspective of the cheater – average tax rate). In the first case, the transaction might be acceptable from a systemic viewpoint since the seller of an item (i.e. the coin buyer) has to exchange an item of value for the coins. In the latter it should be easy to correctly identify intentional cheaters without risking to punish innocent players as well.

 

Here I would like to come back to my argument why a cooldown phase for traded and auctioned items might be meaningful. If players could buy and resell items without any restrictions, coin selling/buying could still be feasible by transferring one and the same item back and forth. That’s why I’ve argued above that a NAT cooldown phase should be implemented for auctioned and traded items although in principle, from the perspective of a player, I would prefer all items and collectibles to be traded or sold without any restrictions.

 

That’s why I suggest

 

  1. replacing the introduction of a progressive tax system instead of the currently applied flat tax (of 10%) for successful auctions in the MUT auction house.
  2. adding alternative modes or revising existing Solo modes allowing repeatedly playing with your MUT team while earning rewards.
  3. replacing the concept of NAT items (which remain NAT all the time) by a cooldown phase for auctioned (or bought) items, traded items and items received as Solo Challenge rewards (in other words, they are NAT only temporarily):
    • bought items from the auction house can only be offered for sale / auction after one week again.
    • traded items can only be offered for sale / auction after one month again.
    • items (incl. collectibles) received as rewards from completing Solo Challenges (which have been NAT in previous Madden versions) are treated as if they have been received via a trade.

From my perspective, my suggestions perfectly fit into the new range system announced today, although I developed it without knowing that there will be this new range system in Madden 22. Funnily enough it has been announced exactly at the same day when I finished writing down my suggestions. I think that this progressive tax scheme could be either 1) used to define the price ranges (or the other way round: i.e. the price ranges are used to define the parameters of the progressive tax scheme), or 2) amend the price ranges. At the moment I’m not aware of any reason why it should not be possible to replace the flat-tax with the progressive tax. The price ranges could still be defined as hard limits (i.e. no auctions are allowed above or below the thresholds), or alternatively could be used for providing information only, e.g. if the upper bound of the price range signals a specific marginal tax rate (for instance 20%). I’d really be interested in developing these ideas further and would like to hear your feedback!

____________________________________________________________________________________
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Joy: you like it! Anger: you don't like it! Frustration: you don't like it but cannot do
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Message 1 of 6 (470 Views)

Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

★★ Novice

Horrible idea in my opinion. The 10% tax is absolutely fine.

Message 2 of 6 (390 Views)

Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

@Mutcat1 Thank you for sharing your opinion! Why do you think that my suggestion is a "horrible idea"?

____________________________________________________________________________________
        Positive Play - Feel the emotions, but be aware what they are telling you!
Joy: you like it! Anger: you don't like it! Frustration: you don't like it but cannot do
     anything against it! Aggression: you don't like it and want to break something.
____________________________________________________________________________________
                   Tell everybody (@joy), give constructive feedback (@anger),
                    ask for help (frustration), and have a break (@aggression)!
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Message 3 of 6 (376 Views)

Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

★★★ Newbie

A progressive tax is a fair idea, but you have it incorrect. Just like IRL the progressive tax affects you based on income, not on the price of the item you sell. For example IRL if you sell $20,000 of stock of Electronic Arts, there is not a set amount of tax on that amount. Rather the tax paid is based on the income of the person who profited. Therefore in Madden the progressive tax should be based on the revenue of the gamer, not the value of their items sold.

 

For example if I do nothing but flip cards on the AH all week and I buy and resell 10 mil coins worth of cards, I think my tax rate should increase exponentially, to the point where it becomes prohibitive to flip more cards because the tax rate will exceed the potential profit margin.

 

However for the casual player just looking to adjust their team and buy and sell a couple cards per week, they should basically pay 0% tax.

 

The progressive tax of each gamer should reset weekly, just like income taxes reset on an annual basis.

Message 4 of 6 (332 Views)

Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

@B0LDwittyNAME Thank you for sharing your opinion! Standard smile

I fully agree that progressive taxes are most often used to tax total income (i.e. personal income taxes) and are not used for single transactions (like value added taxes, for instance). In addition, the starting point of my idea was also income taxes.

However, I think that in the case of the MUT auction house (I'd guess it would be a good idea for other games as well, such as FIFA Ultimate Team) the progressive tax should be applied to transactions anyways. From my perspective, one of the main reasons for a progressive transaction tax is the fact that it punishes greedy (or cheating) players who make use of market power (or in worst case sell coins for real cash) in order to sell items for horrendous prices.

For instance, if a player offers a low silver item for millions of coins just because (s)he made a deal paying real cash for the coins (s)he receives for this transaction, (s)he should not receive the large amount of coins. This would make it much more difficult for cheaters who want to exploit the game for earning real cash (while at the same time sabotaging the market in the game). Unfortunately, following the forum discussions over the last years, coin selling seemed to be a huge issue. Frown

On the other hand, if a player sells a lot of items for fair prices (just because (s)he invests a lot of time in the game and maybe bought a lot of packs) and therefore has a similar (weekly) income in terms of coins (compared to the cheating player), (s)he should not be punished by higher taxes.

That's why I think the progressive tax scheme should be applied to transactions and not to total income (per week, for instance).

____________________________________________________________________________________
        Positive Play - Feel the emotions, but be aware what they are telling you!
Joy: you like it! Anger: you don't like it! Frustration: you don't like it but cannot do
     anything against it! Aggression: you don't like it and want to break something.
____________________________________________________________________________________
                   Tell everybody (@joy), give constructive feedback (@anger),
                    ask for help (frustration), and have a break (@aggression)!
                     I try to help out other players, but I'm not an EA employee

Message 5 of 6 (197 Views)

Re: [Suggestion] Introducing a progressive tax scheme to the MUT auction house

[ Edited ]

After seeing that additionally to NAT (non-auctionable nor tradable), items in Madden 22 can now be NCAT (NAT, and not eligible for sets either), I'd like to highlight my suggestion about "temporary NAT" items once again as well as my suggestion to introduce a progressive tax/fee system for auctions.

 

The main idea why items are not auctionable or tradable (or eligible for sets) is reasoned by the fact that players who use more than one account could repeat Solo Challenges or complete promo-related objectives multiple times (for each account) and therefore could also collect the rewards multiple times. Doing that would therefore be a huge (unfair?) advantage compared to players who only make use of one account. From my perspective, I'd prefer that using multiple accounts was of no additional value for your primary account. In other words, you should have exactly the same chances to improve your lineup if you play with only one account as if you play with several accounts

 

Why should multiple accounts be interesting at all? First, the number of Solo games is quite limited in MUT. If you play on a more frequent / daily basis right from the beginning /release, you will easily complete all Solo Challenges and Solo Battles available. Having completed all games, the only way to earn additional rewards is playing H2H. Using a second account doubles the amount of coins and packs you can earn with solo modes. If you have a third account, you triple it, etc. However, for this to make sense for your primary account, you had to transfer your coins and items to the first account which is against the rules because  "farming"! Doing that might result in being banned from MUT! 

 

How to avoid that players are interested in exploiting multiple accounts? From my point of view, the main reason why players even think of using secondary accounts is that there are not enough opportunities to play with their main account (i.e. the fact that the amount of Solo-modes-based rewards are limited). My first suggestion to deal with this potential exploit would therefore be: make it legal to play more! In other words, if you want to play more, you should be allowed to do it with your main account. That would make it completely useless to use another account. I've therefore suggested to revise Solo Challenges and Solo Battles and add a Solo Season mode to make Solos (incl. rewards) repeatable but link rewards to the players' usered performance (to avoid that algorithms are exploited to farm rewards). I do not get it why you could easily earn millions of coins by "playing" H2H Seasons but quitting immediately as soon as you realise that your opponent is stronger than you while your opponents most likely will immediately quit themselves if your team is much stronger. This strategy of "loading-quitting-loading" (it is not playing but exploiting the fact that you will be matched up against weaker teams too) allows you to earn coins much faster than playing seariously (but Solo). While there should be an incentive to play H2H (and win these games), Solo modes should still be rewarded but with a (slightly) lower amount of coins and packs compared to playing H2H on a mediocre level. If you are very good, you will get even higher rewards from H2H Seasons and Weekend League anyways (Solo rewards will never be competitive compared to high-level H2H rewards).

 

How to avoid that promo-related rewards still incentivize using multiple accounts? While being enabled to earn additional rewards by playing more reduces the incentives for multiple accounts, it does not eliminate them altogether. Why? Solo rewards are the basis for promo-related sets. At the moment - and I think this is a good concept - , players are unable to complete the best promo sets just by grinding Solo Challenges. The rewards available will bring you closer to completing the best sets, but you will need to invest extra (either by investing points or coins, or make use of items from other promos to be used in preparatory sets). If you use multiple accounts, you might transfer missing items (to complete the sets) from secondary to your main account. Doing that results in additional progress towards the best rewards which cannot be achieved using your main account only. Therefore, I'd like to suggest to make it more difficult to transfer items from your secondary to your main account and make use of these items there.

  • Regarding the auction house, if you try to sell these items for a low price, you might be outbid by another player and lose the item. If you offer the item for a high price, you most likely will be able to buy it from your main account. Since you still own the coins, you could transfer them back by selling another item (but now from the main account to the secondary account. Please note again: that is against the rules! Doing that might result in being banned from MUT!). If you do not transfer the coins back afterwards and use the item for the set, I'd say it is completely within the rules. Doing that is similar to buying the same item from somebody else (which is perfectly within the rules). If you are allowed to sell items from promo objectives (or Solo Challenges) after a week only, the value of exploiting secondary accounts is much lower. 
  • Regarding the trading block: since a player has control over both accounts, (s)he can easily trade items from one account to another without having to fear that another player will get the item unintentionally (because the player would like to use it for a set). Again, this is against the rules! Do not do it because otherwise you will be banned from the game! In order to break the incentive to do it anyway, not allowing to trade items received from completing Solo Challenges for one week might be a good compromise (between avoiding the exploit of secondary accounts on the one hand, without limiting the fun of the game for all players who play fairly on the other hand) if it is for a limited time only (e.g. a week).  

If you are only able to use items (from your secondary account) for sets (of your main account) only after a week has passed, the incentives are much lower to get the item via secondary rewards. In the meanwhile, a lot of other new items will be released and the prices / values for the traded item will have dropped already. This way, it is not (or at least less) reasonable to trade items to exploit secondary accounts (for completing sets), but it is much more reasonable to trade items to use them in your lineup now while being allowed to sell it later again (that's how normal players would like to make use of it). 

 

I've also suggested cooldown phases (making items "temporary NAT") for auctioned or traded items (but also items received from Solo Challenges or promo objectives as described above). The main idea is to avoid exploting secondary accounts, but also reduce the effects of arbitrage. For economists, buying a product cheaply and selling it expensively (without providing any additional value) is frowned. In principle, it is also against the rules of the game either because it affects other players who are really interested in the respective item. If another player buys the item cheap and sells it for a higher price,then the player who really wants to use the item is worse off. A cooldown phase for auctioned items would reduce the incentives to buy cheap items just to sell them again. Most likely, prices will drop over time and if you have to wait for a week to sell the item again, the profits might be lower. When combined with the idea of a progressive auction fee, exploiting arbitrage might be much more difficult.

 

Summarising, from my perspective the MUT community would strongly benefit if cooldown phases would be introduced replacing the concept of NAT (or NCAT) by "temporary NAT". The fact that MUT items have their greatest value at the time of their release can be used to prevent the misuse of secondary accounts through the "temporary NAT" concept. On the other hand, the time limit (of the cooldown phase) does not severely restrict the fun of the mode for players who play fairly, as they can use all items sensibly (after some time). I'd also guess that it would benefit EA as well: the fewer players feel tempted to exploit secondary accounts, the fewer players need to be banned, the lower the number of frustrated players.

 

Finally, I made these suggestions to improve the fun for all players. I guess many players who make/made use of secondary accounts are either not knowing that it is against the rules or just do not see any alternative because there are no alternatives available. That's why I suggested to add or revise Solo modes. In addition, In addition, you should not be at a disadvantage if you follow the rules, while my suggestion to adjust the incentives is aimed at fighting the problem at its roots, not the symptoms (i.e. the result of incentives to exploit secondary accounts) in which you have to ban players.

____________________________________________________________________________________
        Positive Play - Feel the emotions, but be aware what they are telling you!
Joy: you like it! Anger: you don't like it! Frustration: you don't like it but cannot do
     anything against it! Aggression: you don't like it and want to break something.
____________________________________________________________________________________
                   Tell everybody (@joy), give constructive feedback (@anger),
                    ask for help (frustration), and have a break (@aggression)!
                     I try to help out other players, but I'm not an EA employee

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