Commerce and Tax balance

[nikkythegreat]

Im pretty sure Im not the only one who thinks that the current balance between tax and commerce income is bad.

A few years into the game you will have something like 70% of your income coming from commerce (barring quirky builds like massing slave cities). I would prefer seeing something like 50-50 balance between trade and tax for regular countries. This would be more intuitive and will really give you a choice of tax or commerce focus unlike now where going for commerce is a no brainer.

But how do we arrive as such is a deeper question, obviously trade income needs to be nerfed a bit and tax income needs to be buffed by around the same amount. However I do not think increasing slave tax income is the solution. Since it would make Slave cities build a lot more powerful and Tribesmen and Freemen almost useless compared to slaves.

I would suggest to increase Freemen and Tribesmen income since they are already in a weak spot as of the moment to increase their utility.

What do you guys think should be done to tweak the current Commerce and Tax income balance.

 

[Marcus Pica]

Prioritizing tax or commerce depends on what kind of country you are playing as.

 

[walti921]

I feel like commerce historically was central to the wealth of states in the period. More so than tax that is. I feel like commerce income is a little deceptive as it is intended to include tariffs(aka tax) on trade.

As is I feel like tax is a little low though...

 

[Bovrick]

Im pretty sure Im not the only one who thinks that the current balance between tax and commerce income is bad.

A few years into the game you will have something like 70% of your income coming from commerce (barring quirky builds like massing slave cities). I would prefer seeing something like 50-50 balance between trade and tax for regular countries. This would be more intuitive and will really give you a choice of tax or commerce focus unlike now where going for commerce is a no brainer.

But how do we arrive as such is a deeper question, obviously trade income needs to be nerfed a bit and tax income needs to be buffed by around the same amount. However I do not think increasing slave tax income is the solution. Since it would make Slave cities build a lot more powerful and Tribesmen and Freemen almost useless compared to slaves.

I would suggest to increase Freemen and Tribesmen income since they are already in a weak spot as of the moment to increase their utility.

What do you guys think should be done to tweak the current Commerce and Tax income balance.

My biggest issue is that Trade is (effectively) insensitive to Warfare while Taxes aren't.

 

[Hootieleece]

Historically these states did tax and get most of their income from it. Trade was always important but was an actual income after thought.

In most City-States and some Monarchies compulsory Military Service (in the Levy) was another kind of Tax on the propertied classes. So having tax income low is an abstraction for the fact that in the Levy System almost all your eligible citizens go to war....as another kind of tax.

Also by reducing the costs of Forts to maintain in the current update the devs had made it easier to create a budget surplus even with the current low levels of tax income and the current Commerce income.

I do think that the balance should be closer to 70% Tax income and 30% Commerce income, but how to balance it like that I have now clue.

 

[IsaacCAT]

IMHO we are using tax (commerce and income) for Public Finances while this was not the main source of funding of States in ancient times. They had infinite money by producing coins (like the central bank printing money). The problem using this system was debasing the economy.

Roman economy - Wikipedia

en.wikipedia.org

In I:R we are modelling the economy that relied very much on commerce, but the funding of the State should be modelled by taxes and issue of coin (money supply).

I made the following suggestion to implement more freedom for the player to use taxes and debasement in the game:

Playing with taxes and currency

Preface: The nation income is derived from taxes, commerce and tributes. The Economy menu allows the player to change taxes, commerce and tributes income with three options each. Observation: the three options for taxes are very basic and other...

forum.paradoxplaza.com

 

[stratigo]

IMHO we are using tax (commerce and income) for Public Finances while this was not the main source of funding of States in ancient times. They had infinite money by producing coins (like the central bank printing money). The problem using this system was debasing the economy.

Roman economy - Wikipedia

en.wikipedia.org

In I:R we are modelling the economy that relied very much on commerce, but the funding of the State should be modelled by taxes and issue of coin (money supply).

I made the following suggestion to implement more freedom for the player to use taxes and debasement in the game:

Playing with taxes and currency

Preface: The nation income is derived from taxes, commerce and tributes. The Economy menu allows the player to change taxes, commerce and tributes income with three options each. Observation: the three options for taxes are very basic and other...

forum.paradoxplaza.com

They didn't have infinite money. Silver and gold are commodities and have rarity. There's a limit to how much you can mine and coin. Rome didn't inflate itself into economic instability. When they lacked the supply of rare minerals, they debased the coins themselves by adulterating their silver and gold contents. It's a different issue to inflation that a modern nation will go through by running the printing presses (or Europe and China went through after Spain started importing and exporting vast quantities of precious metals form central and south america). Fiat currency is theoretically infinite and ultimately responsive to government fiscal policy. Commodity currency isn't nearly as manipulatable, and people are able to, easily, tell the difference between better coins and debased coins. Rome has a limited supply of gold and silver and can only produce so many coins of acceptable quality, and debasing the currency creates long term problems that are not as easy to reign in as inflation is for fiat currency. You can't model this through a base inflation mechanic, the Romans never mined or minted that much gold or silver. And frankly I don't think they could have with the supplies they actually had. Debasing currency has different effects on an economy than inflation does (Though some effects are similar), and pretty much the only way to solve it is to throw out the entire existing coinage system and mint new coins.

 

[IsaacCAT]

They didn't have infinite money. Silver and gold are commodities and have rarity. There's a limit to how much you can mine and coin. Rome didn't inflate itself into economic instability. When they lacked the supply of rare minerals, they debased the coins themselves by adulterating their silver and gold contents. It's a different issue to inflation that a modern nation will go through by running the printing presses (or Europe and China went through after Spain started importing and exporting vast quantities of precious metals form central and south america). Fiat currency is theoretically infinite and ultimately responsive to government fiscal policy. Commodity currency isn't nearly as manipulatable, and people are able to, easily, tell the difference between better coins and debased coins. Rome has a limited supply of gold and silver and can only produce so many coins of acceptable quality, and debasing the currency creates long term problems that are not as easy to reign in as inflation is for fiat currency. You can't model this through a base inflation mechanic, the Romans never mined or minted that much gold or silver. And frankly I don't think they could have with the supplies they actually had. Debasing currency has different effects on an economy than inflation does (Though some effects are similar), and pretty much the only way to solve it is to throw out the entire existing coinage system and mint new coins.

Fair enough, not infinite money. But debasement was the way to finance and not land or family taxes that were around 2-4%. And concerning the OP, commerce was a more significant contributor of income for the state:

During the 1st century AD, the total value of imported goods form the maritime trade coming from the Indian Ocean region (including the silk and spice trade) was roughly 1,000 million sesterces, allowing the Roman state to garner 250 million sesterces of that figure in tax revenue.[92] Even after the reduction in the number of Roman legions from about fifty to twenty-eight (500,000 down to 300,000 full-time soldiers and auxiliaries) the Roman state under Augustus still spent 640 million sesterces on military costs alone per annum (with total state expenses hovering around 1,000 million).[93] Raoul McLaughlin stresses that "as long as international commerce thrived, the Roman Empire could meet these high-level military costs."[93] A further 25 million sesterces in state revenues was gathered by taxing the Roman exported goods loaded on ships destined for Arabia and India (worth roughly 100 million in total).[94]

 

[Daft]

Taxes were very important, especially later in the Empire years. It was one of the main reasons for granting universal Roman citizenship to all free men by Caracalla.

 

[IsaacCAT]

Taxes were very important, especially later in the Empire years. It was one of the main reasons for granting universal Roman citizenship to all free men by Caracalla.

Do you have the reference to read about it?

 

[Daft]

Do you have the reference to read about it?

Ii's mentioned in The History of Rome podcast and I THINK he mentions Gibbons as a reference:

Amazon.com: Decline and Fall of the Roman Empire: The Modern Library Collection (Complete and Unabridged) (The Decline and Fall of the Roman Empire) eBook: Gibbon, Edward, Piranesi, Gian Battista, Boorstin, Daniel J.: Kindle Store

Decline and Fall of the Roman Empire: The Modern Library Collection (Complete and Unabridged) (The Decline and Fall of the Roman Empire) - Kindle edition by Gibbon, Edward, Piranesi, Gian Battista, Boorstin, Daniel J.. Download it once and read it on your Kindle device, PC, phones or tablets...

www.amazon.com

That's what I have on top of my head. With the caveat that no discussion is given to HOW important it was, but for someone like Caracalla to enact such an edict, it would at least imply it was important.

 

[Limbojack]

I don't know how much of the Roman Republic's revenues that came from taxing its own population compared to taxing the trade, so you might be right even though I can't say that this bothers me a lot. One thing that does bother me, however, is that they decided to make precious metal into a trade good instead of managing it like EU4 does where a gold mine simply gives the controller monthly money. I mean, the Iberian gold and silver mines were one of the reasons why Rome usually taxed its provinces but not its citizenry. Well, that and plunder from the constant warring, of course.

But I guess we'll be seeing a total rework of the trade/economy sometime this year because the game does a rather bad job at representing the economy. I mean, why do slaves give tax income? They should merely be a tool to produce trade goods. The fact that we still can't sell imported goods for an increased price, netting us a profit, is still a big problem when it comes to the immersion etc.

 

[PAnZuRiEL]

IMHO we are using tax (commerce and income) for Public Finances while this was not the main source of funding of States in ancient times. They had infinite money by producing coins (like the central bank printing money). The problem using this system was debasing the economy.

Roman economy - Wikipedia

en.wikipedia.org

Most of this article unfortunately applies to hundreds of years after the game starts, up to at least dozens after it finishes. Remember the period covered by the span of the game is 304 BC to 27 BC.

 

[IsaacCAT]

Most of this article unfortunately applies to hundreds of years after the game starts, up to at least dozens after it finishes. Remember the period covered by the span of the game is 304 BC to 27 BC.

Indeed, have you got a book or reference to read about the economy on that period?

 

[Llort_7991]

Depends on situation.

Very small merchant Republics like Venice and the Dutch Republic, a.k.a. the Dutch East-India Company,
raked in absolutely tons of cash in the form of commerce (simply put). They both had very low tax bases.

Ottomans. Pops everywhere, and thus tax income total make up a lot of the total budget (generally speaking).
But they also happened to have a very important and busy trade node with important trade routes like the silk route, amongst others .
Commerce and tax are both big factors. Prosperity wise a double whamy of sorts.

France, before they had colonial empire leaned mostly on there tax income.

Little side track remark here: money is by no means infinite.
It is much more 'infinite' than it was in ancient times, but betting on it being absolute will eventually spell economic disaster.

Money has no intrinsic economic meaning. It is "barter paper & coins", the middle man or woman.
Our productivity, the fruits we bear from it, fixed assets, etc. These all have intrinsic economic value. Some in a completely different way than others.

Bubbles and depressions form when the intrinci economic value our productivity, the fruits we bear from it, fixed assets, etc. is too much out of alignment with the amount of money put simply. Nearing infinite money will exponentionally increase the state of being being 'out of alignment' Eventually creating economic disaster.

 

[stratigo]

Fair enough, not infinite money. But debasement was the way to finance and not land or family taxes that were around 2-4%. And concerning the OP, commerce was a more significant contributor of income for the state:

During the 1st century AD, the total value of imported goods form the maritime trade coming from the Indian Ocean region (including the silk and spice trade) was roughly 1,000 million sesterces, allowing the Roman state to garner 250 million sesterces of that figure in tax revenue.[92] Even after the reduction in the number of Roman legions from about fifty to twenty-eight (500,000 down to 300,000 full-time soldiers and auxiliaries) the Roman state under Augustus still spent 640 million sesterces on military costs alone per annum (with total state expenses hovering around 1,000 million).[93] Raoul McLaughlin stresses that "as long as international commerce thrived, the Roman Empire could meet these high-level military costs."[93] A further 25 million sesterces in state revenues was gathered by taxing the Roman exported goods loaded on ships destined for Arabia and India (worth roughly 100 million in total).[94]

The romans partially funded their military through conquest as well, unable to make up the deficit through taxation, trade, or minting. There's a reason I refer to the romans as a looter economy. It's because the second they stopped looting other states, the economic house of cards to romans built to pay for their armies, supply slaves to their plantations, and open up new land to settle all collapsed. This was the crisis of the third century. But yes, there was also a slow, and then sudden, debasement of currency to keep up with fiscal demand. But only after the game's end date. The Romans only have a standing army in the last few decades of the game, and that army wasn't primarily financed out of state coffers until just before or after the game ends.

I want to note that Diocletian and Constantine managed to successfully fix a number of the issues of the end of the roman looter economy. They fixed bread prices, issued new, less adulterated currency, and conducted an empire wide tax census that fixed a lot of Rome's revenue issues. Albeit at the cost of inflexibility that a century or so on would see the tax base hollow out. So, a bunch of this was less a lack of available currency or tax base and more a failure of bureaucracy to successfully tax rome's extensive holdings. There's a reason the most successful pre modern empires (eg China) relied so heavily on a vast bureaucratic class. Something Rome only ever haltingly did themselves.

Remember also that a roman soldier could also be paid in kind or in land in a pinch. And that roman commanders even in the empire could start paying their soldiers themselves.

 

[stratigo]

Ii's mentioned in The History of Rome podcast and I THINK he mentions Gibbons as a reference:

Amazon.com: Decline and Fall of the Roman Empire: The Modern Library Collection (Complete and Unabridged) (The Decline and Fall of the Roman Empire) eBook: Gibbon, Edward, Piranesi, Gian Battista, Boorstin, Daniel J.: Kindle Store

Decline and Fall of the Roman Empire: The Modern Library Collection (Complete and Unabridged) (The Decline and Fall of the Roman Empire) - Kindle edition by Gibbon, Edward, Piranesi, Gian Battista, Boorstin, Daniel J.. Download it once and read it on your Kindle device, PC, phones or tablets...

www.amazon.com

That's what I have on top of my head. With the caveat that no discussion is given to HOW important it was, but for someone like Caracalla to enact such an edict, it would at least imply it was important.

*Get violently ill at the mention of Gibbons*

Gibbons is a poor source for anything but examining the historiography of Roman history. He has an important place as the start of it, but he's essentially wrong about everything.

There's actually a very recent book released about paying for the roman army specifically in the time period of the game. Soldiers and Silver by Michael Taylor. I haven't had the chance to read it, but I've heard nothing but good things about it. He even did an AMA on /r/AskHistorians

 

[IsaacCAT]

There's actually a very recent book released about paying for the roman army specifically in the time period of the game. Soldiers and Silver by Michael Taylor

I have read the sample of the e-book and is spot on on the game. It does not say it is Paradox sponsored but It very well could be.

I will buy and read it asap. Thank you!

 

[Daft]

*Get violently ill at the mention of Gibbons*

Gibbons is a poor source for anything but examining the historiography of Roman history. He has an important place as the start of it, but he's essentially wrong about everything.

There's actually a very recent book released about paying for the roman army specifically in the time period of the game. Soldiers and Silver by Michael Taylor. I haven't had the chance to read it, but I've heard nothing but good things about it. He even did an AMA on /r/AskHistorians

I know, but I am not even sure he used Gibbons as a source here.

 

[stratigo]

Reading over the AMA Dr Taylor did, he brought up something I didn't know about early to mid republic coinage. In that it was a hilarious mess. They had little standardization and were using one pound bronze coins of all things and didn't start minting their own silver coins until after the second punic war. This does make some of what I know about their census classes and the change from panalopy to wealth as an indicator of your ordo make more sense. It's hard to have an obvious store of wealth when your denomination is foreign silver coins and pounds of bronze XD.