The complexity of the various systems of taxation in Terath are simple only when compared to the complexity of its laws. Each Kingdom pays a small Tithe to the High Queen in The Broken City, but other than that, the different realms all used their own system of taxation.
Akeron is an excellent example of this complexity, as it is a realm which has become well known for its Merchants and Craftsmen. In Akeron, different tax rates apply for different types of products when being sold at market. Everything from Wool to Jewelry has a specific tax rate. Alchemists, Scroll Makers, Rune Crafters, and Weapon Smiths pay a 20% tax for anything they sell (due to the dangers of poisons, magic, & weapons) while Medics, Armor Smiths, & Tinkerers pay only a 10% tax on items they sell. However, on certain Market Days in specific regions of Akeron, these tax rates are temporarily adjusted. And any attempts to export goods which have originate from Akeron also results in considerable taxation from the Akeronian Government in addition to the local taxes that the seller must pay in whichever kingdom the goods are sold.
In addition, being part of a registered merchant’s guild in Akeron reduces your tax liability, and reduces the number of potential governmental fees that your mercantile pursuits are subject to. In Akeron, income taxes can be cripplingly high, partially depending upon the annual tax legislation. However, specific guilds can establish contracts with the crown to reduce the taxes that their laborers pay on their income, and those contracts can even allow for the guilds to reduce their own tax rates as a whole, partially based upon the wages they pay their workers. For instance, The Banking House of Caulder and Scale are notorious for having obtained one of the lowest taxable burdens amongst the Akeronian guilds, but this only applies to income from Banking, not to other forms of Commerce.
Meanwhile in Ebrus, the tax rate is closer to being even across the board for everyone at around 25%, plus a considerable property tax for any land owned. But even though the Ebran Tax system is much less complex than in Akeron, it should be noted that this primary tax rate can vary from year to year depending upon the “need” of the Kingdom, just as it often does in other kingdoms. To add more complexity, In Ebrus, citizens gain a lifetime deduction on all Taxes if they are a veteran of the Ebran Military. This deduction becomes more beneficial the longer you remain in the military. There are even a number of laws and taxes which reflect the strange gender-biased traditions of Ebrus. For instance, in proper Ebran fashion, you actually have to pay an annual “protection” tax if you are an unmarried woman over the age of 16.
In the Kingdom of Chindius, the tax you pay is essentially based upon the amount of land that you “own”, with extra taxes being due for each building or “substantial land improvement” on the property. Although it should be noted that all land in Chindius is very specifically owned by the crown (as is the tradition in many kingdoms). Each Lord or Lady is obligated to collect taxes and a yield of annual crops from the land-owners, but there is surprisingly no internal sales-tax to speak of. Although there are taxes which can impact inter-kingdom imports and exports. This “land-tax” is one of the reasons that Gypsies prefer to travel in Chindius. As they usually do not own any land, they are essentially free of any tax-burdens there. On the other hand, prime real estate rarely changes hands in Chindius and so skilled artisans and wealthy scholars can sometimes end up paying outrageous rents. In addition, those who violate the laws of Chindius or fail to pay their taxes often end up in one of their forced-labor Lumber Camps.
These and other forms of taxation allow for the Kingdoms of Terath to build improvements for their people. This is why Ebran towns often have walls to keep monsters out, why The Queen’s Lands possesses such excellent irrigation channels built through government programs, why Westerland has such well-stock armories for their militia, and why many of the greatest cities in Terath have kingdom-established shelters for the poor. Taxation is also the method through which most of the Kingdoms of Terath are able to maintain large standing armies.
Taxation in Falconcrest –
The Kingdom of Falconcrest is very different from any of the other kingdoms of Terath where taxation is concerned. Falconcrest charges no Property Tax. Falconcrest charges a flat income tax of 5% regardless of how much money you make, and regardless of how you make it. And the Sales Tax in Falconcrest is at a surprisingly low rate of 1%.
These meager taxes help to pay the wages of The Falconcrest Range Guard, and pay for the appointment of a skeleton military which is trained to work cooperatively with the independent (but kingdom sanctioned) Mercenary Guilds. These taxes purchase rare prismatic gems and eldritch crystals which allow The Kingdom of Falconcrest to empower and maintain certain magical Artifacts which cause the land and livestock in Falconcrest to flourish, allowing the people to prosper through efforts of their own labor. And of course, the money goes towards the administrative costs of running the kingdom. Meanwhile, the Kingdom directly owns many valuable assets, including claim to considerable natural resources. The Kingdom of Falconcrest has built up a sizable treasury, and uses that coin in order to make investments or extend loans of considerable sums of money to nobles and merchants with business prospects which they deem to be worthy.
Aside from the roaming Range Guard, it is up to each village and each farmstead to determine and pay for their own defense, education, and wellbeing. Each Lord’s retinue, each hamlet, and each village must gather in council and determine whether or not they will pay their local legionnaire to keep the roads safe for gypsies, merchants, and travelers. This is the reason that Falconcrest can sometimes be a dangerous place to live, especially in wild places.
Due to this system of Taxation, it is possible for anyone in Falconcrest to make a fortune and rise to power. However, Falconcrest suffers from a noteworthy problem which stems from a lack of enforced participation in the “public good”. There are many of those who benefit from resources, goods, or services but do not pay for them, which results in either an under-provision of those goods or services, or in an overuse or degradation of a common property resource.
Most often it is those who have not sworn the oath of citizenship which are found to be unwilling to put their own funds towards a public good such as hiring mercenaries to eliminate a nest of monsters, instead preferring to free-ride on the payment provided by their neighbors.
This parasitism can cause contention, and has been the instigating event in no small number of violent outbreaks, some of which resulted in multiple deaths. In addition, due to a lack of a guiding hand where communal resources are concerned, the Kingdom of Falconcrest can be particularly at risk to suffer from the tragedy of the commons, where individuals acting independently and rationally according to each’s self-interest behave contrary to the best interests of their community or group.
As such, the nobles and community leaders of Falconcrest are known for actively supporting guilds for Merchants, Mages, Mercenaries, and Medics so that these guilds can use a portion of the payments which they receive to engage with the larger and more complicated problems.