Urban Taxes

Urban Taxes

  In an urban center, be it a large city or a tiny township, most of the economic value is made up of people working for other people. Income tax is a very modern concept in the real world and has not made it to Scarterra. No one really has the ability to audit income of all their subjects accurately anyway.   This means that lords of urban centers need to get creative. Sometimes there are fees for using bridges, city gates, wells, or market spaces. Sometimes every household pays a flat tax which may be determined by the head count, the size of the house, or the number of windows in a house.   Sometimes weird taxes can lead to weird tax avoidance strategies such as a tax on the number of windows leading to houses being built with one giant window instead of multiple normal sized windows.   The norm in urban areas (and even some rural areas) is excise taxes, which are taxes on specific goods and services. This of course leads to an artificially repressed demand for that good or service which may be the point more than the money itself. If the local ruler does not like something such as prostitution or alchohol, but doesn't want to ban the practice outright, he might slap a high tax on it. He might not actually care about the money very much.   Most often, the lord cares about the money a lot and will slap a tax on whatever he thinks he can get away with, even basic commodities. Since the lord often controls the local mill, he can easily put a tax on flour and there few ways around it.   Luxury or high status goods are often taxed. Since reagent trade is often carefully monitored. Since the customers of these products tend to be big spenders, they are less likely to raise a stink about their taxes and fees, at least in theory.   No matter what a lord taxes or does not tax, there are going to be demographics of people that end up paying more or less tax and someone is going to complain about it. One strategies some lords do, especially if they live in a trading hub is try to create taxes that primarily hit foreigners passing through. Sometimes these are nicknamed "Tengku Taxes" which of course actually tengku loathe.   Whether they hit the bird folk or not, "Tengku Taxes" are generally the sorts of taxes generally makes the locals happy, but it can backfire if merchants and others start avoiding the trading hub causing prices to go up.   A tax on high end wine is going to primarily hit the upper classes while a tax on ale is primarily going to to hit the lower classes. A local lord can show blatant favoritism or lack thereof by what they tax. A tax on beard length could be levied specifically to target an expat dwarf community for instance.   You are also going to have being dodging their taxes. If the lord levvies a tax for using a public bridge, people who don't have large wagons are going to choose to wade across away from the bridge. If the lord levvies a tax on tax ale, there are probably going to be speakeasies somewhere. Sometimes what is or is not taxed is going to depend, not on what is fair or is not fair but on what is easy to enforce.   Without going into the weeds on every possible tax on every possible tax. Here is a simplified chart on what taxes will probably look like as a reflection spending. Note, spending, not income.   Tax System is   Generous <2%   Light 3-7%   Normal 8-12%   High 13-20%   Oppressive 21%+   21% taxes may not seem "oppressive" by modern standards, remember most Scarterrans are fairly poor and living hand-to-mouth as is. Also, farmers traveling to town are going to get slapped with taxes and tolls and they are already had to give a large portion of their harvest to the local lord.