Fiscal Policy: Wealth Tax, Bank Interest & Sovereign Reserves

From:: Ministry of Finance & Treasury
Applies to:: All accounts at Bank of ASEAN
Effective:: 24 March 2026

Summary

This document sets out the ASEAN Motor Club's fiscal policy for managing the money supply, including:

A progressive wealth tax on idle bank balances, scaled by offline duration
Bank interest with balance-dependent scaling and offline decay
Establishment of the Sovereign Reserves Fund, with a monthly Net Investment Returns Contribution (NIRC) to the operating treasury

These measures aim to curb hyperinflation, incentivise active participation, and build long-term national reserves.

1. Overview

The ASEAN Motor Club economy has experienced sustained inflationary pressure over the past year, driven by high interest rates on bank deposits and a concentration of wealth in idle accounts. Without intervention, the money supply will continue to grow unchecked, eroding the purchasing power of active participants.

This policy introduces three interlocking mechanisms:

Wealth Tax — a progressive hourly tax on offline accounts above $500,000, using marginal brackets
Interest Decay — bank interest that decays with time offline, rewarding active players
Sovereign Reserves — a locked national fund that receives wealth tax revenue, with only a controlled monthly drip to the operating treasury

! Important: All monetary figures in this document are denominated in the in-game currency ($). The exempt threshold of $500,000 means accounts at or below this balance are never taxed.

2. Wealth Tax

2.1 Scope & Exemption

The wealth tax applies to all character bank accounts held at the Bank of ASEAN with a balance exceeding $500,000 (the exempt threshold). Characters with a null game GUID (zombie accounts) are excluded.

Tax is computed and deducted hourly, based on the number of hours the character has been offline.

A character who logs in briefly resets their offline clock to zero. This is by design — rewarding engagement, even briefly.

2.2 Progressive Brackets

Tax is applied marginally across three tiers. Only the portion of balance within each bracket is taxed at that bracket's rate.

Table 1: Wealth Tax Brackets
Bracket	Balance Range	k-factor
Exempt	$0 – $500,000	0 (not taxed)
Low	$500,000 – $2,500,000	0.75
Mid	$2,500,000 – $10,000,000	1.25
High	$10,000,000+	1.75

2.3 Rate Formula

The hourly tax rate for each bracket uses a log-plateau decay function, which ensures monotonically increasing cumulative tax over time:

r(t) = k · ln(1 + t/S) / (S + t)

where:
  t = hours offline
  S = 2,163 hours (~90 days)
  k = bracket-specific multiplier (see Table 1)

The cumulative fraction lost follows k/2 · ln(1 + t/S)², which grows monotonically — there is no recovery window for long-term idleness.

2.4 Effective Tax Rates

Table 2: Effective hourly rate by offline duration (High bracket, k=1.75)
Offline Duration	Hourly Rate	~Daily Equivalent
1 hour	0.00037%	0.009%
24 hours (1 day)	0.0087%	0.21%
168 hours (1 week)	0.054%	1.30%
720 hours (1 month)	0.17%	4.14%
2,163 hours (~90 days)	0.28%	6.81%
8,760 hours (1 year)	0.19%	4.60%

The hourly rate peaks around 90 days, then slowly decreases — but cumulative loss always grows. A player offline for a full year will lose substantially more total balance than one offline for 90 days.

3. Bank Interest

3.1 Base Rate

Bank of ASEAN pays hourly interest on all liability (checking) accounts. The base rate is 2.2% per hour, with a 2× multiplier for online players.

Table 3: Interest Rate Parameters
Parameter	Value
Base hourly rate	2.2%
Online multiplier	2.0×
Balance scaling threshold	$10,000,000
Balance scaling constant	$40,000,000
Offline decay k	2.0

3.2 Balance Scaling

For balances above the $10M threshold, interest is scaled down using an exponential decay:

scale = exp(-(balance - threshold) / scale_constant)

effective_rate = base_rate × scale

This creates a natural ceiling (~$170M) where interest earned approaches zero, preventing unlimited compounding.

Table 4: Effective interest rate by balance (online player)
Balance	Scale Factor	Effective Hourly Rate
$1,000,000	100%	4.40%
$10,000,000	100%	4.40%
$30,000,000	60.65%	2.67%
$50,000,000	36.79%	1.62%
$100,000,000	10.54%	0.46%
$170,000,000	1.83%	0.08%

3.3 Offline Decay

When a player is offline, their interest rate decays using a log-plateau formula with k=2.0. The longer they are offline, the less interest they earn — eventually approaching zero.

The interest decay uses the same formula family as the wealth tax. Combined, a long-term idle player earns negligible interest while losing balance to the wealth tax — ensuring net-negative growth.

4. Sovereign Reserves Fund

4.1 Purpose

Inspired by Singapore's GIC and Temasek sovereign wealth funds, the ASEAN Motor Club maintains a Sovereign Reserves Fund — a locked government asset account that accumulates wealth tax revenue.

The reserves serve three purposes:

Liquidity destruction — money taxed from idle accounts is removed from the active money supply
Long-term stability — reserves provide a shock absorber for the economy
Community metric — reserves represent national prosperity, visible to all citizens

4.2 Fund Structure

Table 5: Government Accounts
Account	Type	Purpose
Treasury Fund	Operating (ASSET)	Day-to-day spending: job bonuses, subsidies, Ministry budget
Sovereign Reserves	Locked (ASSET)	Receives wealth tax. Not directly spendable.

! Key rule: Wealth tax revenue flows only to Sovereign Reserves — never directly to the operating treasury. This prevents the treasury from becoming permanently flush and devaluing active contributions.

4.3 NIRC — Net Investment Returns Contribution

Following Singapore's constitutional framework, a controlled portion of reserves is transferred to the operating treasury as the NIRC:

Daily transfer = Sovereign Reserves × 5% / 30

≈ 0.167% of reserves per day

This transfer runs as a daily automated process at 00:05 server time.

Table 6: NIRC Projections (based on ~$16M/day wealth tax inflow)
Timeline	Estimated Reserves	Monthly NIRC	Daily NIRC
Month 1	$480,000,000	$24,000,000	$800,000
Month 3	$1,200,000,000	$60,000,000	$2,000,000
Month 6	$2,100,000,000	$105,000,000	$3,500,000
Year 1	$3,500,000,000	$175,000,000	$5,833,000

Note: Reserves growth decelerates over time as wealth tax revenue shrinks (taxable balances decrease). The projections above assume a gradually declining inflow.

5. Flow of Funds

The following diagram illustrates the complete monetary flow in the ASEAN Motor Club economy:

Figure 1: Flow of Funds

5.1 Government Employee Revenue

Government employees are a significant source of treasury revenue. When a gov employee completes deliveries, their base earnings are confiscated from their wallet and redirected directly to the Treasury Fund. Contract completion bonuses are burned (destroyed from circulation without entering the treasury), serving as an automatic money sink.

For full details on the three-track income system, see Government Employee Programme: Financial Mechanics.

6. Economic Impact Assessment

6.1 Comparison: Active vs Idle Players

Table 7: 30-day net balance change by player behaviour ($10M starting balance)
Player Type	Interest Earned	Wealth Tax Paid	Net Change
Daily active (1h+/day)	+$3,168,000	-$21,600	+$3,146,400
Weekly active (1h/week)	+$1,584,000	-$151,200	+$1,432,800
Idle 30 days	+$86,400	-$1,231,200	-$1,144,800
Idle 90 days	+$7,200	-$2,030,400	-$2,023,200
Idle 365 days	~$0	-$3,369,600	-$3,369,600

For detailed analysis including balance tier impact, tax vs interest crossover modelling, and projected revenue based on real account data, see Fiscal Policy Analysis.

7. Technical Reference

Full list of system constants

Table 9: All fiscal policy constants
Constant	Value	Description
`INTEREST_RATE`	0.022	Base hourly interest rate (2.2%)
`ONLINE_INTEREST_MULTIPLIER`	2.0	Bonus multiplier for online players
`INTEREST_THRESHOLD`	10,000,000	Balance above which interest is scaled down
`INTEREST_SCALE`	40,000,000	Exponential decay scale constant
`INTEREST_DECAY_K`	2.0	Offline interest decay factor
`WEALTH_TAX_EXEMPT`	500,000	Balance exempt from wealth tax
`WEALTH_TAX_S`	2,163	Log-plateau time scale (hours, ~90 days)
`NIRC_MONTHLY_RATE`	0.05	5% of reserves drips to treasury per month

Cron schedule

Job	Schedule	Description
Bank Interest	Every hour, minute 0	Applies interest to all eligible accounts
Wealth Tax	Every hour, minute 0, second 30	Applies progressive tax to offline accounts >$500K
NIRC Transfer	Daily at 00:05	Transfers 5%/30 of Sovereign Reserves to Treasury Fund
Credit Score	Daily at 00:15	Evaluates all character credit scores

Accounting treatment

Wealth Tax Entry

Account	Debit	Credit
Player Checking (Liability, Bank)	tax_amount	—
Sovereign Reserves (Asset, Government)	—	tax_amount

Debit on a liability account reduces the player's balance. Credit on an asset account increases reserves.

NIRC Transfer Entry

Account	Debit	Credit
Treasury Fund (Asset, Government)	nirc_amount	—
Sovereign Reserves (Asset, Government)	—	nirc_amount

Credit reduces reserves, debit increases operating treasury.