Chapter 519 Tax Reform 4 Tiered Tax Rates

"Or..."

Paul scanned the officials from various departments present one by one.

"Should we cut the budget of a certain department?"

The meeting room fell into silence.

"No! Lord Graman."

Hansel was the first to break the silence, "I think it is imperative to abolish the tax farming system."

"Yes, the old system is no longer appropriate."

"We all agree with Lord Graman's wise decision."

Others also reacted.

Cut department budgets? This is simply intolerable. The current State Council is rapidly expanding in size. Everyone is desperately trying to get work for their departments to highlight their importance. Without sufficient budget, it won't work.

Who wants to sit on the bench with a reduced budget? Obviously, no one present is willing to do so.

In contrast, let those rural landlords lose some skin.

In fact, it is well known in the State Council that Count Graman hates the tax farming system. The Count has expressed his disgust many times in different places and at different times, so his decision today did not make everyone feel too sudden.

However, Hansel soon discovered a problem. Even if the tax farmer system was abolished, could more taxes be collected?

"Lord Graman."

He carefully raised his question, "Are you going to raise the tax rate?"

Paul asked blankly, "Raise the tax rate?"

Hansel made a hypothesis, "For example, each head in the territory needs to pay 100 copper shields to the lord. When the tax farmer is here, each person collects 110 copper shields. He pays 100 of them to the lord's house and keeps the remaining 10 copper shields for himself. Now you cancel the tax farmer and directly collect 100 copper shields, but from our point of view, we actually get the same amount as before the tax farmer was abolished."

Paul laughed, and he used He pointed his finger twice in the direction of Hansel and said, "This is indeed a problem. Fielding, my tax director, what do you think?"

Fielding thought about it for a while, and then explained to everyone, "Sir Abbott's doubts are reasonable, but in theory, without the tax farmers exploiting in the middle, the people will have more money in their hands. The extra money can stimulate their desire to consume, thereby promoting the prosperity of the market, which means that more goods will circulate, and more products will be manufactured, and we can collect more taxes in commerce and industry."

So that's it, many people understood in their hearts.

"Abolition of tax farmers is only the first part of the reform."

Paul continued: "The second part of the reform is to change the per capita tax to property tax and income tax."

The per capita tax, everyone knows that the people in the territory, regardless of gender, age, rich or poor, are counted by head, and everyone has to pay a certain amount of property. This is the most stable and basic source of tax for the lords of all parts of Aldo and even His Majesty the King. Therefore, the size of the population in the territory determines whether a lord is powerful. The population in the king's direct territory is the largest, so the king is the most powerful "lord" in the country.

It's just that Alda has vigorously developed industry and commerce in recent years, and taxed commodities and manufactured products circulating in the city, so the per capita tax here has dropped to a less conspicuous position-after all, people cannot be produced continuously like products in the factory, but the per capita tax is still one of the important tax sources of the Government Affairs Council.

As for property tax, it actually already existed in this era and was very common. You had to pay taxes to the lord for the house you lived in, the land you cultivated, and the property you inherited from your parents. There were even animal taxes, window taxes, stove taxes, and other messy taxes. In some territories, you even had to pay taxes to the lord for raising cats and dogs.

When Hansel first worked under Paul, one of his most important tasks was to check the land in the territory, which offended many people.

After Paul had the important tax source of industry and commerce, he cancelled most of the taxes that he thought were ridiculous, and only retained a few taxes such as land tax, property tax, and inheritance tax. This is also an important reason why Arda can attract more refugees than other territories.

As for income tax, this was the first time everyone present had heard of it. Paul explained to everyone that it is to levy taxes based on the profits earned by individuals or groups, such as wages and salaries, production and business income of industrial and commercial households, income from contracting and leasing operations, labor remuneration income, interest, stock dividends, property leasing income, property transfer income, etc.

"In the future, all of you and your subordinates will have to pay taxes on the salaries they receive in their positions."

Paul first reminded everyone.

Old Ford said with some concern: "This may make some people feel resentful of Lord Graman, so everyone should set an example and provide psychological counseling for the staff of their own departments, and pay more attention to their remarks."

"This will be a huge tax!"

Hansel made a rough estimate in his mind and couldn't help but be a little surprised. But it is also true that Earl Graman has abolished so many miscellaneous taxes and head taxes. Now that the finances are in difficulty, what's wrong with compensating in other aspects.

Wait, but the head tax has been abolished. Whether this income tax can fill the loophole and achieve tax growth still needs to be concluded in practice.

It was not just Hansel. Every participant had similar doubts in their hearts. If property tax and income tax could not make up for the loss of the head tax, wouldn't it be a loss? Even if it could be equal to the head tax, it would just be a name change. What was the meaning of the reform?

No mistakes, just read it in the 6-9 book bar!

Count Graman must have other means.

"There is a third item in the reform!"

As expected by everyone, Paul continued to announce.

"Whether it is property tax or income tax, we will implement a stepped tax rate in the future."

Stepped tax rate?

This was the first time everyone heard this description.

Except for Mellon and old Ford, who agreed on the content of the reform with Paul, everyone looked confused.

"Let me explain it to you."

Paul explained to everyone, while observing everyone's expression.

"Take personal income tax as an example. A person's income is his tax amount. If his monthly income does not exceed 1 silver guilder, he does not have to pay taxes. If his monthly income is between 1 and 5 silver guilders, he has to pay 2% tax. If his monthly income is between 5 and 10 silver guilders, he has to pay 5% tax. If his monthly income is between 10 and 20 silver guilders, he has to pay 10% tax. If his monthly income is between 20 and 50 silver guilders, he has to pay 20% tax. If his monthly income is more than 50 silver guilders, he has to pay 40% tax. . "

"In short, income is divided into levels, and different tax rates are set for each level. People with low incomes pay less or even no tax, while people with high incomes pay more tax. The more income they earn, the more they have to pay. "

"Of course, the tax amount levels and tax rates in the above example are just made up for illustration. How this level should be divided and what tax rate should be set for each level still need to be studied in detail by the tax department before a conclusion can be drawn. "

As soon as Earl Graman finished speaking, there was a bang in the minds of everyone present, as if something had exploded.