Sometimes, implementing a “one-size-fits-all” approach might seem reasonable but creates the greatest inequality.
How could Fu Lingchuan not know that taxation was the lifeblood of a nation? However, when continental kingdoms were first established, merchant taxes and agricultural/industrial taxes were equal—this was common practice. He frowned and asked, “What does Your Majesty suggest?”
“One-tenth tax.” In simple terms, when merchants’ transactions in these cities reached ten copper coins, they would pay one copper coin to the tax official. The one-thirtieth tax followed the same conversion principle.
This was effectively doubling the rate. Fu Lingchuan prided himself on being tough, but he hadn’t expected her to make such an exorbitant demand. Hearing this, he was shocked: “One-tenth! Aren’t you afraid of scaring away all the merchants?”
Feng Miaojun smiled and asked him, “Even if we implemented a one-thirtieth tax, would the tiger market disappear?”
“No.” On this point, Fu Lingchuan could be certain.
“Exactly. Even if we lowered it to one-fortieth or one-fiftieth, many merchants would still go to the tiger market to trade, unless we exempted all taxes.” She shrugged her shoulders. “It’s human nature to want to take advantage.”
The tax exemption was impossible for the government, as daily costs were fixed. Fu Lingchuan said gravely, “I understand, but a one-tenth tax is too high and would drive merchants entering the city to the tiger market instead.”
“Let me finish,” Feng Miaojun lightly tapped the low table in front of her. “This tax rate sounds frightening, but we will allow merchants to offset their taxes.”
“How so?” Fu Lingchuan immediately became interested. Taxation was taxation—every coin collected belonged to the government and entered the national treasury. He had never heard of taxes being offset. This was only because it was him listening; if it were those old pedants in the royal court hearing her shocking words, they would undoubtedly kneel without even listening to the content and cry out, “Your Majesty must not!”
“Although we collect a one-tenth tax, when these merchant caravans eat, rest, lodge, and play in the four cities of Mituo, they can offset part of their tax amount. The greater their expenditures, the higher the tax offset.” Feng Miaojun smiled, revealing teeth as white as ivory. “Additionally, we can regularly hold official auctions in Mituo City—a small auction every three days and a large one every five days. The auction items can range from rare treasures to bulk commodities in high demand. The Luofu fishery currently charges a twelve percent commission fee for sales. We can stipulate that once a merchant’s cumulative tax payment in the four cities of Mituo reaches eight hundred taels of silver, the commission fee will be immediately reduced to eight percent.”
She leaned forward slightly: “Eating and staying in Mituo City is at least ten times better than in the tiger market, not to mention the environment and security. Even someone as shrewd as Xu Linghai could have an unexpected mishap and almost be robbed. Other merchant caravans traveling through the tiger market would inevitably encounter similar troubles.” Without fees, there was no management and personal safety naturally had no guarantee—service quality lagged. This was the original sin of “free services.”
“Although Mituo City’s merchant tax is expensive, for legitimate merchant caravans, isn’t traveling all about peace of mind and safety? In Mituo City, official brokers serve as intermediaries, and until a transaction is completed, neither buyer nor seller knows the other’s identity—isn’t this safest? Moreover, people need to eat and sleep, so why wouldn’t they be pleased to offset taxes with these essential activities?”
“Taking advantage is human nature, and there will always be merchants unwilling to spend money, so places like the tiger market will continue to exist.” Feng Miaojun shrugged. “However, after comparing the two, most people will move to Mituo City.” This was like how piracy of creative works could never be eliminated, yet legitimate users increased—what mattered was service, interaction, and security.
There’s no such thing as a good product that’s cheap, let alone free.
As Fu Lingchuan listened, his eyes grew increasingly bright. At first, he merely found it interesting, but later he found it reasonable. He couldn’t help but clap his hands and say, “Indeed! People love to take advantage, thinking that more offsets mean more savings and more savings mean more profit. To offset their taxes, they will spend more in Mituo City!” Money that they might have spent elsewhere would now be spent there to feel satisfied. This would directly stimulate the consumer economy in the four cities of Mituo.
Feng Miaojun took a light breath: “I’m just concerned that this will greatly increase accounting work. Do we have enough talented people for this?” In those days, few commoners were literate, and even fewer could keep accounts.
Fu Lingchuan couldn’t help but laugh: “You needn’t worry about that. The Tu Yu Kingdom in the south has many merchants who excel at calculation. We can hire some specialists from there. In another five or six years, we won’t lack such talent.”
South of the Red Cliff Forest, at the border where Yan, Jin, and New Xia met, many small kingdoms and sectarian forces were active. This was also why the four cities of Mituo were particularly important—they were the most crucial hubs connecting this region.
Feng Miaojun said seriously, “This method is just a concept; many rules still need to be refined, such as how to prevent tax certificate forgery. If cousin also finds it feasible, we will need to work with the court officials to perfect it.” Without pausing, she continued, “For the first few auctions, we can bring out some rare treasures for sale. The transaction prices will certainly be low—we can take items from the treasury left by An Xia. As this news spreads to the four corners with traveling merchants, more and more people will come to Mituo City in the future. Do you remember Luofu’s prosperity? Many of those nobles weren’t just passing through.”
Fu Lingchuan suddenly stood up, straightened his robes, and then bowed deeply to her: “Your Majesty is wise. I will go draft the law immediately.”
This was the first time he had bowed to her. Feng Miaojun smiled and accepted it with composure, watching as his figure hurriedly disappeared before returning to her chambers.
Fu Lingchuan’s ability to act was astonishing. The next day, a fairly complete plan was presented at the court meeting for the officials’ review.
Tax rebates were commonplace in her original world, but for people of this era, it was mind-blowing. The royal court discussed it quite enthusiastically. Feng Miaojun occasionally spoke up, hitting crucial points, in stark contrast to her silence during previous court sessions.
Some astute officials immediately noticed that something seemed different.
Fu Lingchuan demonstrated his forcefulness, and so this tax law was quickly passed and implemented. By this time, a full year had passed since the founding of New Xia. Various industries had recovered, and people were gradually settling down. After Fu Lingchuan was appointed as State Preceptor, he began to manage the nation’s fortunes, allocating a large portion of his elemental power to harmonize heaven’s timing and earth’s advantages to promote abundant harvests.
A year earlier, large numbers of refugees had migrated eastward. Besides organizing agricultural production, reclaiming wasteland, and promoting commerce, New Xia also undertook major construction projects, building roads, water conservancy, and other infrastructure, utilizing manpower and eliminating social risks.
After witnessing Fu Lingchuan’s governance methods, Feng Miaojun was truly impressed. His greatest strength was his orderliness—he could organize hundreds of laws and decrees methodically.
What she lacked most was precisely this kind of persistence to see things through to the end.
Fortunately, over the past year, heaven had been favorable, with abundant rainfall and no natural disasters. Thus, New Xia was like a newborn seedling growing vigorously. The most direct manifestation was that the elemental power contained in the small tripod in Fu Lingchuan’s hand was increasing.