Traveller and Taxes

[mike wightman]

That could easily be interpreted as the subsector duke has the responsibility to pay the taxes from his/her subsector into the Emperor's slush fund.

Imperial duke = Imperial tax collector

 

[flykiller]

noting for Flykiller's lack of recollection

I have nothing past little black book 6. I like the freedom ....

 

[DanDare]

From the article on Roman taxes

In the early days of the Roman Republic, public taxes consisted of modest assessments on owned wealth and property. The tax rate under normal circumstances was 1% and sometimes would climb as high as 3% in situations such as war. These modest taxes were levied against land, homes and other real estate, slaves, animals, personal items and monetary wealth. Taxes were collected from individuals and, at times, payments could be refunded by the treasury for excess collections. With limited census accuracy, tax collection on individuals was a difficult task at best.

Given that is a tax on held wealth, not revenue, 1% is a HUGE tax burden. It means in times of poor revenue you will have to sell off capital to pay your taxes, putting every tax payer on a shrinking asset basis. That means they will need to aggressively increase their holdings to compensate somehow, or become impoverished. And what if you can't sell your assets for the assessed value?

 

[kilemall]

From the article on Roman taxes



Given that is a tax on held wealth, not revenue, 1% is a HUGE tax burden. It means in times of poor revenue you will have to sell off capital to pay your taxes, putting every tax payer on a shrinking asset basis. That means they will need to aggressively increase their holdings to compensate somehow, or become impoverished. And what if you can't sell your assets for the assessed value?

That's a strange take on likely economic behavior.

Let's say I have taxable assets worth $1 million.

A 1% tax means I have to pay $10,000 per year.

All that means is I have to be able to generate that 10K in profit out of those assets just to hold ground, which should be a trivial exercise in most cases.

Or that the continued holding and use of that property is worth 10K annually to me over and above other costs, paid out of my income which is not taxed other then what it adds to my 1 million in assets.

In fact, such a tax should promote 'best use' of a given asset or property.

If the holder is absentee or non-productive, or the asset has dropped in income-generating potential, well it's value is going to drop too and the person will sell it, likely for less then $1 million since it isn't useful, and the new owner will be paying less tax and/or fostering new economic activity with the asset.

I'm seeing mostly win here.

Now we should keep in mind that Roman economics was less 'dense' then our own, not as many ways to make money and the money supply would be less liquid and slower velocity, and so 1% is probably more of a hit then it sounds like to our ears, but there is a certain wisdom to the scheme.

 

[DanDare]

Hi kilemile,

you are not considering unproductive assets that are valued by their resale value only (gold bars for example) or times when asset valuations are inflated making their income production less than 1% of their valuation. The asset stripping extraveganza of the '90s was where asset valuation outstripped revenue creation. So this tax will gut an asset collection when times are down. That's the opposite of profit tax which comes into play when all is well but leaves you alone when your facing hard times.

 

[flykiller]

but leaves you alone when your facing hard times.

that depends on who is facing the hard times.

 

[whartung]

that depends on who is facing the hard times.

Actually, it doesn't. Hard times are hard times. What matters is how much reserve you have. If you have "more than enough" to get through the hard times, then, in the end, it's not (or less of) an issue.

If you don't, then the hard times are harder.

Let's say I have taxable assets worth $1 million.

A 1% tax means I have to pay $10,000 per year.

Here, we call this "property taxes".

And this is the classic scenario when you have someone in retirement that has, say, a large house. It's perfectly productive asset. It actually grows in value from year to year. But the asset is not liquid, which basically means to pay the tax, the owner is forced to liquidate the entire asset (since they can't just sell, say, a bedroom). Normally, the tax was paid out of the persons fixed income. But as inflation weakens that income, and/or the taxes go up, eventually the fixed income no longer covers the tax burden, and thus they have to sell it.

 

[flykiller]

Actually, it doesn't.

sure it does! if your neighbor is unemployed, you're in a recession. if you're unemployed, you're in a depression.

What matters is how much reserve you have.

that's not how rich people think. what matters to them is how much they're getting at any particular moment - they have investments and lifestyles to maintain. and that's not how those who have the power to tax think. what matters to them is how much they're taking in at any particular moment - they have spending ... to ... spend ... whatever.

 

[Condottiere]

Having to pay taxes on your assets tends to incentivize monetizing them, or risk having to liquidate them.

 

[Timerover51]

Having to pay taxes on your assets tends to incentivize monetizing them, or risk having to liquidate them.

Sort of like when a farmer with a lot of land but not a lot of cash dies, and the heirs have to sell some of the land to pay the estate taxes.

Or when someone with a lot of rental property finds the property vacant and not generating income, but still has to pay property taxes as if it were generating income. A small strip mall just to the north of me is a case in point. I think that it has gone through tax sale court a couple of times.

 

[aramis]

Actually, it doesn't. Hard times are hard times. What matters is how much reserve you have. If you have "more than enough" to get through the hard times, then, in the end, it's not (or less of) an issue.

If you don't, then the hard times are harder.



Here, we call this "property taxes".

And this is the classic scenario when you have someone in retirement that has, say, a large house. It's perfectly productive asset. It actually grows in value from year to year. But the asset is not liquid, which basically means to pay the tax, the owner is forced to liquidate the entire asset (since they can't just sell, say, a bedroom). Normally, the tax was paid out of the persons fixed income. But as inflation weakens that income, and/or the taxes go up, eventually the fixed income no longer covers the tax burden, and thus they have to sell it.

Actually, Property taxes are one form of asset tax. Noting that in the US they tend to run between 2% and 105 of assessed value, and assessed value often bears little resemblance to market value. (A friend of mine bought a house for $4000, and was assessed 10% on a tax valuation of $140,000...)

Total assets are seldom taxed, because they're hard to assess the value. Values of anything with a title, however...

 

[kilemall]

Hi kilemile,

you are not considering unproductive assets that are valued by their resale value only (gold bars for example) or times when asset valuations are inflated making their income production less than 1% of their valuation. The asset stripping extraveganza of the '90s was where asset valuation outstripped revenue creation. So this tax will gut an asset collection when times are down. That's the opposite of profit tax which comes into play when all is well but leaves you alone when your facing hard times.

<Shrug> still not seeing the downside, except for the gold hoarder, who again can be making money with it by buying tangible profitable land/business/ship or lending it or trading, all of which is fostering economic activity as opposed to acting the dragon and just sitting on it.

 

[kilemall]

Here, we call this "property taxes".

And this is the classic scenario when you have someone in retirement that has, say, a large house. It's perfectly productive asset. It actually grows in value from year to year. But the asset is not liquid, which basically means to pay the tax, the owner is forced to liquidate the entire asset (since they can't just sell, say, a bedroom). Normally, the tax was paid out of the persons fixed income. But as inflation weakens that income, and/or the taxes go up, eventually the fixed income no longer covers the tax burden, and thus they have to sell it.

In which case again it's 'best use', the person in question does not have the assets to maintain, it goes to someone who can and in the meantime the liquidiation allows for a move to more modest quarters and hopefully some investment to not be chained to X fixed income.

While I am not aware of any scholarly treatises on the topic, I'm guessing 'land value' during the Roman Empire was in general higher then post-collapse. The taxes kept the roads open, people in the cities to buy products and Legions on the frontiers, and that paying for those services on an adhoc local basis would have been cost-prohibitive. IMO at a 1% rate likely a multiplier to maintain value and markets over what was paid even after 100 years.

 

[Timerover51]

In which case again it's 'best use', the person in question does not have the assets to maintain, it goes to someone who can and in the meantime the liquidiation allows for a move to more modest quarters and hopefully some investment to not be chained to X fixed income.

While I am not aware of any scholarly treatises on the topic, I'm guessing 'land value' during the Roman Empire was in general higher then post-collapse. The taxes kept the roads open, people in the cities to buy products and Legions on the frontiers, and that paying for those services on an adhoc local basis would have been cost-prohibitive. IMO at a 1% rate likely a multiplier to maintain value and markets over what was paid even after 100 years.

In the Roman Empire, tax farming was the practice. An individual would give the Roman Emperor or provincial governor, or prior to that the Roman Senate, a sum of money, and then get the right to recover more than that sum of money from a specific area or sector of business, say a monopoly to export wine from a given area for a set period of time. Now, there was not an enormous amount of cash floating around even during the Empire, with much trade still being done by bartering products and services. It was not unknown for Legionaires to paid with quantities of salt, which they could then sell or exchange for goods and services, or grants of land in newly conquered areas. The Tax farmers were notorious for collecting far more in taxes than they paid the government, with the money collected in the form of gold, silver, or bronze coinage, removing it from local circulation to be spent in Rome or Italy. It was analogous to the specie drain from the colonies in the New World to Europe, or the specie drain prior to the Reformation from Northern Europe and England to Rome.

I will see if I can find some examples of the rapacity of the tax farmers in Tacitus or one of the Roman historians to show what I mean.

 

[kilemall]

In the Roman Empire, tax farming was the practice. An individual would give the Roman Emperor or provincial governor, or prior to that the Roman Senate, a sum of money, and then get the right to recover more than that sum of money from a specific area or sector of business, say a monopoly to export wine from a given area for a set period of time. Now, there was not an enormous amount of cash floating around even during the Empire, with much trade still being done by bartering products and services. It was not unknown for Legionaires to paid with quantities of salt, which they could then sell or exchange for goods and services, or grants of land in newly conquered areas. The Tax farmers were notorious for collecting far more in taxes than they paid the government, with the money collected in the form of gold, silver, or bronze coinage, removing it from local circulation to be spent in Rome or Italy. It was analogous to the specie drain from the colonies in the New World to Europe, or the specie drain prior to the Reformation from Northern Europe and England to Rome.

I will see if I can find some examples of the rapacity of the tax farmers in Tacitus or one of the Roman historians to show what I mean.

While I look forward to any elucidation on the specific example, I will comment that in every civilization with standing armies and/or civil works to maintain,

• there is going to be a taxing mechanism/system,
• the morality and fairness, perceived or otherwise, and it's impact on productivity are matters that ultimately determine both
• economic choices and
• a large measure of loyalty or revolt against that polity.

 

[Timerover51]

The following quotes come from the Project Gutenberg EBook of A History of Rome to 565 A. D. by Arthur Edward Romilly Boak. It can be downloaded from Project Gutenberg.

The provincial taxes. The taxes levied upon the provinces were at first designed to pay the expenses of occupation and defence. Hence they bore the name stipendium, or soldiers’ pay. At a later date the provinces were looked upon as the estates of the Roman people and the taxes as a form of rental. The term tributum (tribute), used of the property tax imposed on Roman citizens did not come into general use for the provincial revenues until a later epoch. As a rule the Romans accepted the tax system already in vogue in each district before their occupancy, and exacted either a fixed annual sum from the province as in Spain, Africa and Macedonia or one tenth (decuma) of the annual produce of the soil, as in Sicily and Asia. The tribute imposed by the Romans was not higher, but usually lower than what had been exacted by the previous rulers. The public lands, mines, and forests, of the conquered state were incorporated in the Roman public domain, and the right to occupy or exploit them was leased to individuals or companies of contractors. Customs dues (portoria) were also collected in the harbors and on the frontiers of the provinces.

The tax collectors. Following the custom established in Italy, the Roman state did not collect its taxes in the provinces through public officials but leased for a period of five years the right to collect each particular tax to the private corporation of tax collectors (publicani) which made the highest bid for the privilege. These corporations were joint stock companies, with a central office at Rome and agencies in the provinces in which they were interested. It was this system which was responsible for the greatest evils of Roman provincial administration. For the publicani were usually corporations of Romans, bent on making a profit from their speculation, and practised under the guise of raising the revenue, all manner of extortion upon the provincials. It was the duty of the governor to check their rapacity, but from want of sympathy with the oppressed and unwillingness to offend the Roman business interests this duty was rarely performed. Hand in hand with tax collecting went the business of money lending, for the Romans found a state of chronic bankruptcy prevailing in the Greek world and made loans everywhere at exorbitant rates of interest. To collect overdue payments the Roman bankers appealed to the governor, who usually quartered troops upon delinquent communities until they satisfied their creditors.

The rapacity of the governors. A further source of misgovernment lay in the greed of the governor and his staff. The temptations of unrestricted power proved too great for the morality of the average Roman. It is true that there were not wanting Roman governors who maintained the highest traditions of Roman integrity in public office, but there were also only too many who abused their power to enrich themselves. While the shortness of his term of office prevented a good governor from thoroughly understanding the conditions of his province, it served to augment the criminal zeal with which an avaricious proconsul, often heavily indebted from the expenses of his election campaigns, sought to wring a fortune from the hapless provincials. Bribes, presents, illegal exactions, and open confiscations were the chief means of amassing wealth. In this the almost sovereign position of the governor and his freedom from immediate senatorial control guaranteed him a free hand.

Provincial governors were typically appointed for one year, and the cost of gaining the office was heavy in terms of money. The need to recover one's investment, which is what it basically was, was very high, and governors, while in theory answerable to the Senate, were effectively a tax collector unto themselves.

There is a fair amount in the histories of the reign of Justinian the Great in the early 500s about the merciless taxation of the provinces, so this continued for several hundred years.

Note: Ordinary bold is from the text, bold italics are from me. The Ten Per Cent tax from Sicily was sometimes collected in the form of grain, while that from Asia was in the form of specie.

 

[kilemall]

I always liked this article since it goes into the finances and logistics of Julius Caesar vs. Pompey, and the economics of operating legions-

http://www.strategypage.com/articles/default.asp?target=pompey.htm

 

[Timerover51]

I always liked this article since it goes into the finances and logistics of Julius Caesar vs. Pompey, and the economics of operating legions-

http://www.strategypage.com/articles/default.asp?target=pompey.htm

I am not exactly a fan of Dupuy's "Quantified Judgment Method," and yes I have the book, and I actually have discussed it with other military consultants. It sort of works if you are talking hand-to-hand combat between evenly trained and numbering forces. It does not work that well the closer you approach the modern era, especially once passed the period of short-range blackpowder weapons. As for naval power, forget it.

Second, Nofi assumes that the trireme galley was capable of exercising Mahan's Command of the Sea theory. In reality, the Trireme had severe tactical and logistic limitations. Pompey's massive fleet was unable to stop Caesar and Mark Anthony from crossing the Adriatic Sea and confronting Pompey in northern Greece and Illyria. John Guilmartin, in his book, Gunpowder and Galleys, does quite a good job at showing how Mahan's Command of the Sea theory breaks down when applied to Galley Warfare. The chapters in J.F.C. Fuller's first volume of his Military History of the Ancient World covering the Roman civil wars are quite useful for study.

 

[kilemall]

I am not exactly a fan of Dupuy's "Quantified Judgment Method," and yes I have the book, and I actually have discussed it with other military consultants. It sort of works if you are talking hand-to-hand combat between evenly trained and numbering forces. It does not work that well the closer you approach the modern era, especially once passed the period of short-range blackpowder weapons. As for naval power, forget it.

As I recall, a lot of using QJM is art and not science, so you have to have a feel for the numbers going into it- I expect a lot of people disagree with the model and therefore are going to not do well with it.

It IS a bit Lancastrian, even with all the multipliers.

Supposedly it predicted the scale of the lopsided Gulf War casualties when other systems didn't, so if true that would be a pretty good real world modern day datum point vindication.

Second, Nofi assumes that the trireme galley was capable of exercising Mahan's Command of the Sea theory. In reality, the Trireme had severe tactical and logistic limitations. Pompey's massive fleet was unable to stop Caesar and Mark Anthony from crossing the Adriatic Sea and confronting Pompey in northern Greece and Illyria. John Guilmartin, in his book, Gunpowder and Galleys, does quite a good job at showing how Mahan's Command of the Sea theory breaks down when applied to Galley Warfare. The chapters in J.F.C. Fuller's first volume of his Military History of the Ancient World covering the Roman civil wars are quite useful for study.

True, but it also means an easier approach into the heart of Caesar's power base could have had salutary force division effects.

Haven't read Fuller's stuff, thanks for the reminder.

 

[DanDare]

In Traveller terms a Type S scout has an assessed value of 39.768 MCr, so a 1% tax adds 30,640 Cr a month to your costs which are 3, 064 Cr per month. So that means you would have to make 33,724 Cr per month from the ship to break even on owning it. (Ignoring fuel, crew and maintenance costs)