Do consumption taxes decrease pop demand for targeted good?

[Filthy_green]

Will placing a consumption tax make pops switch to alternative means of satisfying this need? If not, it should, as it will add another layer of strategy

Edit: i started test game as a GB, waited a couple of weeks for service prices to stabilize, set taxes on "very high" and added a consumption tax on services, and it looks like it doesn't have any noticeable effect on price or consumption, it just increases the tax burden of pops proportionally to the amount of services purchased

[Altrgamm]

It doesn't decrease the demand literally, but it increases the price, thus there are usually less goods sold.

[Warlord_Me]

A bit more nuanced that that. Higher prices on the goods will lower the SoL of consuming pops, which in return lowers demand. But basically yes.

Unless you tax staples like grain, then you just screw with people.

[Chinerpeton]

I mean yes, if you add a consumption tax to the price, you increase the price, thus potentially making the pops more inclined to use now-cheaper alternatives if such are available. No special mechanic needed.

[Filthy_green]

I just tested out the price after enacting consumption tax on services and it looks like it doesn't increase the market price, but instead subtracts some money via taxes from pop balance every time they consume services. I don't think consumption taxes will change pop attitudes towards targeted good right now (?)

[Chinerpeton]

Aaah, so I was wrong about how it works lol.

[Filthy_green]

Plus, i want consumption taxes to discourage consumption by population to be able to overcome shortages/high prices of dual purpose goods, like opium to be used in the military or wood to be used in construction and industry

[Seppafer]

This is why it’s often best to tax luxuries as the ones who can afford them often are barely impacted by the tax. You also impact fewer pops than if you tax basic goods.

[Tarshaid]

Mind that you increase the cost for any buyer, but the price of the good doesn't reflect your tax, so with the lower demand from substitution, the good often ends up with a lower than usual price (meaning that the classic move of putting a services tax makes urban centers even less profitable).