Shocked and Persuaded

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Separating Fact From Fiction

Fun and Games Fueling Education

So I haven’t been posting in a while as I am looking for a job and working on a book. Anyway I have been playing around with what I am calling a “War Games Tax” that I describe below and it is one that if anyone reads this post I would love for you to pass it on to your congressional delegation. After reading it you are welcome to comment and I would be happy to share my data with anyone interested in this idea that I don’t think to many people could argue with. Cheers and I hope you enjoy the read!

I have been working some calculations trying to get at how much general education revenue could be conceivably generated if we taxed what I will broadly call “war games”, which include at this point “Call of Duty: Black Ops (PS3 & X360)”, “Halo: Reach (X360)”, and “God of War III/God of War Collection (PS3). All of these are top sellers for Activision (Call of Duty), Microsoft (Halo), and Sony Computers (God of War). Their average annual revenues are in toto $1.23 billion with “Halo” at $686 million leading the way and “God of War Collection” bringing up the rear at $29 million annually (Fig. 1).

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Not a bad profit margin don’t you think? More importantly I was thinking that if there are so many people with the bravado to fight wars via their video consoles they wouldn’t have a problem paying a heavy tax on those games, which could be used to fund educational programs throughout the country. So I went about trying to gather up as much high-quality data as I could get on dollar sales, weekly units, and in order to come up with a progressive “War Games Tax” I used iCasualties data on a per 100,000 person basis across all fifty states+Washington, DC (no US territories due to high concentration of troops stationed there). I then used the per capita data – with Vermont being the highest (2.568) and Utah the lowest (0.486 per 100,000) – summed those values and converted them into percentages. I then multiplied the $1.23 billion figure across tax rates of 35%, 25%, 10%, and 5%, with the per 100,000 percentage conversions used to multiply across tax rate scenarios. If you do that the numbers are pretty staggering.
Lets just focus on Vermont for a second as a teaser for what we could extract from this pseudo-war profiteering that doesn’t get nearly the coverage that the explicit profiteers do. Vermont would be able to rely on an annual tax revenue of (Fig. 2):
1. 22.4 million at 35%, 14.9% of FY 2011 budget deficit
2. 16.0 million at 20%, 10.7% of FY 2011 budget deficit
3. 6.4 million at 10%, 4.3% of FY 2011 budget deficit
Or
4. 3.2 million at 5%, 2.1% of FY 2011 budget deficit
wargamestax
While none of these numbers is eye watering they are not trivial either, with the top rate accounting for nearly 15% of the FY 2011 budget deficit. This is not a progressive or regressive tax idea, rather it is an anti-predatory tax idea with the folks that so flippantly turn on their video consoles to play the latest virtual War On Terror paying the heaviest price. What is wrong with that? New England alone would generate:
1. 55.3 million at 35%, average of 3.5% of FY 2011 budget deficit
2. 39.5 million at 20%
3. 15.8 million at 10%
Or
4. 7.9 million at 5%

So as you can see this is not a panacea but is a step in the right direction AND unlike the much maligned soda-tax proposed by Mayor Bloomberg and Governor Paterson in NY I would argue that there should be less resistance to a tax that takes money from people that like to play video games about war but wouldn’t be caught dead signing up to go to Iraq, Afghanistan, Pakistan, Iran, etc etc and puts that money in to the educational infrastructure of this country. I would like to see someone rail against this idea in public with the lights and cameras on.

Category: Economics, Education

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