Late Han Zhao Tang

July of the second year of Shenwu.

Since declaring himself emperor in June, Zhang Yu has been busy almost every day in order to finalize the military and tax systems of the Zhang Tang dynasty as soon as possible. He either discusses matters with the Privy Council or holds meetings with the Ministry of Personnel and the Accounting Department.

Among them, the issue of tax collection was the most heatedly discussed. Because the Accounting Department had the power to verify fiscal taxes, Yu Yi, at Zhang Yu's suggestion, made a request to Zhong Yao and Du Ji that tax reform should not reduce the state's relevant household tax revenue.

Zhang Yu also made a public demand to reduce the burden on the poor. Therefore, Zhong Yao, Du Ji and the officials under the Ministry of Personnel needed to consider how to formulate the three-level, nine-grade household tax and the standards for its formulation.

“The most powerful and wealthy families pay a tax of fifty shi of grain and five bolts of silk per household. This may not be in line with Your Majesty’s intention to use the rich to help the poor!”

Du Ji was not satisfied and said, "If this tax is implemented, a large clan that owns 300 hectares of land will only need to pay 50 shi of grain. Meanwhile, poor people who own less than 1 hectare of land will have to pay 2 or 3 shi of grain. The amount of land is a hundred times greater, but the tax paid is only 25 times greater. If this is implemented, those with more land will pay less, and those with medium-sized land will pay more. This is definitely biased!"

Cui Yan said, "The wealthy have many children, and many of them are subject to corvée labor. It would be better to reduce land taxes and collect more money from corvée labor."

"The land owned by powerful clans is fertile. If we do not levy heavy taxes on it, how can we enrich the country?" Du Ji retorted, "At the end of the Han Dynasty, Emperors Huan and Ling bought and sold official titles. Although they were motivated by a desire for pleasure, it was also due to the depletion of the national treasury. But look at powerful clans like Yuan, Yang, and Cao. They have tens of thousands of followers, enormous assets, and hundreds of miles of fertile land. Do they serve the country?"

Cui Yan said, “Governing a large country is like cooking a small fish. In the past, Your Majesty reduced household taxes but increased taxes on salt and wine. If you rashly impose heavy taxes now, it may cause dissatisfaction among the powerful clans.”

Previously, due to food shortages in the country, Zhang Yu prohibited the people from drinking alcohol. Although the ban was later lifted, in order to earn more tax revenue, he levied a heavy tax on alcohol to subsidize the country.

Therefore, although Zhang Yu did not receive money from large households in terms of household tax, he collected a considerable amount of tax from them in terms of salt and wine taxes.

Du Ji remained calm and said, "Your Majesty conquered the world on horseback, so why should you fear the dissatisfaction of a mere powerful clan? Moreover, if a powerful clan rebels, it means they harbor ill intentions. Sending troops to quell the rebellion will not only deter the local people but also clean up the land. What's wrong with that?"

After a long silence, Cui Yan said, "I largely agree with Lord Du's words. However, the southern bandits have not yet been eliminated, so we must proceed with caution!"

Seeing Du Ji's firm stance, Zhong Yao coughed and said, "We can discuss the matter with the upper-class households first, while the lower-class households and the lower-middle and lower-upper-class households can be settled first. What do you all think? The lower-upper-class households should contribute two shi of millet or two shi and five dou of rice, and one bolt of silk (hemp) and two zhang of hemp, plus twenty days of corvée labor. Each household should contribute two zhang of silk. What do you all think?"

Previously, under the Tang Dynasty system, each taxpayer paid three shi of millet, one bolt of silk (or hemp), and five liang of cotton. Compared to today, the amount of rice is reduced by one shi, and the amount of silk (or hemp) is slightly increased, but if the cotton category is removed, it can be said that the new tax, compared to the old tax, significantly reduced the burden on the lower classes, allowing them to enjoy the benefits of the unified Central Plains.

“It’s feasible!” Du Ji and Cui Yan responded one after the other.

"For each additional level of household, how much more grain must be paid?" Yu Yi, who was watching the play, suddenly asked.

“Each level is taxed five dou of grain, and for the middle-middle level households, the tax is doubled to one shi or more. The lower level is taxed one shi, the lower-middle level one shi and five dou, the lower-upper level two shi; the middle-lower level two shi and five dou, the middle-middle level three shi, the middle-upper level five shi; the upper and lower levels ten shi, the upper-middle level twenty shi, and the highest level fifty shi,” Cui Yan said.

Zhong Yao further added, saying, "The four households from the lower upper level to the middle upper level are considered middle level, the upper level consists of the top three households, and the lower level consists of the bottom two households."

Yu Yi asked, "Wouldn't this estimate result in a lower household tax rate?"

Zhong Yao pondered for a moment and said, "If we collect fifty shi from the upper households, and there are a hundred households, we can get five thousand shi, which is enough to cover the taxes of several thousand lower households."

Du Ji said, “However, if we can collect 100 shi (a unit of dry measure), then if there are 100 households, we can obtain 10,000 shi. If there are 1,000 households in the country, we can collect 100,000 shi of grain, which is comparable to the output of 40,000 to 50,000 households. If we follow Your Majesty’s suggestion of 200 shi, then if there are 1,000 of the largest households in the country, we can collect 200,000 shi of grain, which is equivalent to the output of 100,000 poor households. Why not do it?”

Although Du Ji was a descendant of the Du clan of Jingzhao, the family had declined by the time of his birth, and he could be described as a poor scholar. Having experienced the hardships of life at the grassroots level, Du Ji deeply understood the struggles of ordinary people and the ruthless power of powerful clans in acquiring resources. Therefore, he was always very proactive in levying heavy taxes on these powerful clans.

Zhong Yao frowned and said, "That is true, but it is not easy to implement. At least we should wait until the world is unified and the situation in China is more stable before levying heavy taxes on the powerful clans. Now that the situation is just beginning to stabilize, it is not advisable to impose heavy taxes, lest a rebellion break out during the southern expedition."

Seeing the disagreement within the Ministry of Personnel, Yu Yi stroked his beard and pondered, then said, "What you all say makes sense. Why don't we present a rough draft to His Majesty, explaining the advantages and disadvantages, and see what His Majesty's response is?"

Although Yu Yi, as the Minister of Finance, had the right to participate in the deliberation of the new tax plan, he did not have the right to modify or refute it, since Zhong Yao was in charge of the tax plan. Therefore, even if Du Ji had different opinions, he could not change Zhong Yao's plan. Thus, in this stalemate, involving Zhang Yu, who was in a higher position, was a good solution.

“What Prime Minister Ji said makes sense. We can report it to His Majesty and submit it for his approval,” Du Ji said.

"good!"

Seeing that everyone was looking for Zhang Yu, Zhong Yao relented and said, "In that case, I will go to the palace and report the new tax system to His Majesty."

Without further ado, Zhong Yao quickly organized the plan and then went to the palace alone to report on the tax system.

Not long after, through a eunuch's announcement, Zhong Yao met Zhang Yu, who was busy with government affairs.

"What brings you here, Prime Minister?" Zhang Yu asked, gesturing for Zhong Yao to sit down.

"Your Majesty!"

Zhong Yao took out a memorial from his bosom and said, "Your Majesty, I have been discussing the tax system with you gentlemen for many days. Now I have a draft of the tax system, and I would like to ask Your Majesty for your guidance!"

Zhang Yu reached out and opened the memorial, casually asking, "Besides the memorial, do any of you gentlemen have different opinions?"

“Your Majesty, we have no objection to the lower and middle class household taxes, but there is a significant discrepancy in the upper class household tax,” Zhong Yao said.

"The highest-ranking households are taxed fifty shi of grain and five bolts of silk. Is there any discrepancy between these amounts?"

“Your Majesty, Du Ji believes that the upper-class households should pay at least one hundred shi of grain.” Zhong Yao said truthfully, “However, I believe that if we impose heavy taxes on the powerful clans when the world is not yet at peace, it may cause unrest. In the past, Emperor Shizu unified the world in the twelfth year of Jianwu, and the land survey began in the fifteenth year of Jianwu.”

"Your Majesty's original intention in implementing the tax system was to rob the rich to help the poor and to supplement the national treasury, which is a policy to benefit the people. However, it involves too many issues, and I am worried that bandits will rise up in the Central Plains, which will be detrimental to Your Majesty's unification of the world."

As he spoke, Zhong Yao bowed deeply and said earnestly, “The world has been in turmoil for more than ten years, and fortified villages are scattered throughout the prefectures and counties of Guandong. If powerful clans rebel, these fortified villages will become city walls, and even if our Tang army is strong, it will be difficult to quell them. Therefore, I hope Your Majesty will act with caution.”

Seeing Zhong Yao's sincere advice, Zhang Yu's expression was slightly moved.

Although he was somewhat dissatisfied with Zhong Yao's lack of assertiveness and his overly tactful nature, it was precisely because of Zhong Yao's tactful character that he was able to help Zhang Yu solve many problems, turning big problems into small ones, and then resolving the small ones.

If a strong-willed person is left to guard the front, it will inevitably stir up internal conflicts, which will be detrimental to the soldiers fighting at the front. Just look at Shen Pei under Yuan Shao; Shen Pei was quite capable, which is why Yuan Shao valued him highly.

However, Shen Pei was of a strong and unyielding character. During his time in command, he detained Xu You's family, which ultimately led to Xu You's defection. If Shen Pei had been replaced by Zhong Yao, even though Zhong Yao and Xu You were at odds, Zhong Yao's tactful nature would have ensured that Yuan Shao's rear was securely protected, preventing him from engaging in political infighting with high-ranking officials at crucial moments.

Thus, the character of an old man has both advantages and disadvantages. Zhong Yao's smooth-talking nature may make him unsuitable for reform. However, when it comes to uniting various forces and supplying the front lines with military provisions and supplies, no one can replace Zhong Yao.

"What the Prime Minister says makes sense!"

Zhang Yu read through the memorial for a long time and said, "The matter of tax law reform involves many issues. I will give you a few days to think about it before I give you my reply."

As he spoke, Zhang Yu looked at Zhong Yao and asked, "Has the current tax law been estimated? If the tax system proposed in the memorial is implemented, will the tax revenue be higher than before?"

Zhong Yao shook his head and said, "Without considering our family's assets, I dare not say whether there will be any discrepancies, much less that the new tax will be more than the old tax!"

"You should first take Guanzhong as an example and have officials inquire about your family's assets. This way, you may be able to get a rough estimate," Zhang Yu said.

"Your subject has contacted Lü Sili!"

Seeing that Zhang Yu had no further instructions, Zhong Yao hurried off to take his leave. After Zhong Yao left, Zhang Yu looked at the memorial in his hand, his brows furrowing slightly involuntarily. He was very clear about the advantages and disadvantages of the three-tier, nine-grade tax system.

Historically, the three-tier, nine-grade tax system was first established in the Northern Qi Dynasty. During the Sui Dynasty, due to Yang Jian's usurpation of the throne, the nine grades were reduced to three in an effort to win popular support. After Li Yuan seized power, he restored the three-tier, nine-grade system, which continued until the Kaiyuan era, ultimately collapsing largely due to the An Lushan Rebellion. Even so, from the mid-Tang Dynasty onwards, and even during the Two-Tax System, the three-tier, nine-grade system was still used for tax collection.

During the Five Dynasties and Ten Kingdoms period, due to the turmoil of war, the nine-level provincial system was consolidated into five levels, and the Song Dynasty continued this five-level household system. Furthermore, the Jin and Yuan dynasties also continued the system of tax collection by corvée households, which was differentiated into a three-class, nine-jia system. However, the Yuan Dynasty's outdated system rendered the corvée household system ineffective.

The three-tier, nine-grade system was used by successive dynasties because it shares similarities with the progressive tax rates of later dynasties. However, the three-tier, nine-grade system was not without its problems; only a strong central government and outstanding officials could keep the complex tax system running smoothly.

Therefore, from the Tang and Song dynasties onward, the tax administration systems of the Yuan, Ming, and Qing dynasties showed institutional decline and inefficiency compared to their predecessors. Zhang Juzheng promoted the Single Whip Law, merging various taxes into one, which seemed to reduce the burden on officials and the people, but in reality, it reflected the decline of Ming dynasty officials, making it impossible to operate a sophisticated tax system.

Thanks to the Eastern Han Dynasty's emphasis on Confucian education and the family traditions of learning within local clans, the quality of grassroots officials was high. The Tang Dynasty was able to operate a sophisticated and complex tax system. However, while the system was operational, the key was how to ensure that powerful local clans willingly paid taxes.

Zhang Tang's tax rate for upper-class households is much higher than Li Tang's. The difference in Li Tang's tax rate is only eight times, while Zhang Tang's tax rate is now twenty-five times higher, but Zhang Yu is still not satisfied.

However, as Zhong Yao pointed out, expanding the tax differential now would inevitably displease the powerful clans, and they should wait until the country is unified. But Zhang Yu was unwilling to wait that long, since once the tax rate was set, it would be difficult to increase it again.

"Your Majesty, Jia Xu is requesting an audience outside the palace!"

"please!"

"promise!"

After a short while, Jia Xu entered the hall.

Before Jia Xu could even bow, Zhang Yu handed over the memorial.

"Please read it first!"

"promise!"

Jia Xu showed curiosity and began to study the new tax law.

After a long pause, Jia Xu respectfully asked, "What questions does Your Majesty have?"

Zhang Yu took a sip of tea and said unhurriedly, "I believe the taxes for the middle and lower classes are safe and feasible. However, I think the taxes for the upper classes are too low, and I intend to require the upper-class households to pay two hundred shi of grain. However..."

As Zhang Yu slowly explained the problem, Jia Xu understood what Zhang Yu was worried about.

After stroking his beard and reciting for a while, Jia Xu seemed to have gained some insight and said, "I am aware of Your Majesty's worries. Although I am not an official of the Ministry of Personnel, I have some humble opinions that may be able to alleviate Your Majesty's concerns!"

"What's the plan?" Zhang Yu asked, rousing himself.

"I wonder if Your Majesty is aware of the story of 'changing one's mind frequently'?"

"I have heard of it!"

The phrase "changing one's mind frequently" comes from Zhuangzi, and Zhang Yu knew the story behind it regardless of his past or present life.

Jia Xu smiled with a sly look and said, “The three-tier, nine-level household system benefits the poor but not the wealthy. So why doesn’t Your Majesty temporarily implement a three-tier, seven-level household system, combining the top three households into one level, with a household tax of twenty shi of grain? At that time, the top households will be indifferent, while the lower households will be worried, and China will be difficult to govern.”

"After pacifying the realm, Your Majesty divided the country into nine grades from seven. The upper grade consisted of three households, each receiving ten, twenty, and one hundred shi of grain. At that time, the very upper-class households were resentful, the lower-class households were happy, and the middle-class households were neither happy nor sad. If any powerful families wanted to rebel, very few in a prefecture would respond. Generals would be sent to quell the rebellion, and the worries would disappear!"

"And that's not all!"

Jia Xu smiled and said, "Now that the world is at peace, Your Majesty can order all powerful families in the inner prefectures, except those in the border prefectures, to dismantle their fortified villages and not allow them to remain as strongholds for government offices. Anyone who refuses to dismantle their fortified villages will be punished for rebellion. If the fortified villages are dismantled first and then heavy taxes are levied, no one will dare to rebel. At most, there may be some hidden bandits causing trouble."

"color!"

Jia Xu's words made Zhang Yu's eyes light up, and he couldn't help but applaud and cheer!
Jia Xu's strategy profoundly understood the human tendency to seek personal gain. While the twenty-shi tax was something large families at the prefecture level were willing to bear, let alone prominent families at the state level, it was a painful burden for large households at the county level. However, because the resentment of these county-level households did not affect the overall situation, the new tax law could be implemented.

When the top-ranking households were required to contribute 100 or 200 shi of grain, the remaining households, having compared their contributions, would not only feel less resentful but would also develop a sense of schadenfreude. Why would the remaining households willingly follow the powerful clans in rebellion, as that would mean certain death?

Before increasing taxes, Jia Xu's strategy of ordering the demolition of fortified villages was brilliant, undoubtedly depriving powerful clans of the means to resist.

For powerful clans, fortified villages served as strongholds and solid foundations against warlords and bandits during times of war. However, for dynasties on the verge of unification, these fortified villages were uncontrollable entities, posing a basis for separatist rebellions, and thus had to be dismantled.

During the unified Sui and Tang dynasties, due to the constant warfare during the Wei, Jin and Northern and Southern Dynasties, fortified villages were almost everywhere. Yang Jian and Li Shimin repeatedly ordered the demolition of these fortified villages, and their attitude was the same as Zhang Yu's, believing that preserving them was tantamount to treason.

"Although Wenhe is not good at literature and politics, he is good at understanding people's hearts!"

Zhang Yu was very satisfied and said, "You should draft a new memorial based on the Prime Minister's memorial and send it to the Prime Minister in my name, so that he can discuss the tax system again according to Wenhe's wishes."

"Yes, sir!" Jia Xu replied.

With the new tax plan in place, Zhang Yu felt much more at ease and asked, "Since the Chinese already have a nine-class household tax system, do you think the Hu people should also be taxed according to this method?"

"Under the whole heaven, all are subjects of the king. Both the Chinese and the barbarians are Your Majesty's subjects. Now that the Chinese are about to implement a new tax system, how can the barbarians not follow suit?" Jia Xu pondered for a moment and said, "But the barbarians are fierce and do not engage in production, but produce a lot of livestock. If Your Majesty wants to collect taxes from the barbarians, you should have someone who is well-versed in barbarian customs formulate the household tax."

"Now that Xuzhou is pacified, let Li Song return to the capital to oversee this matter!"

After considering for a moment, Zhang Yu said, "I hereby summon the leaders of the various tribes in the northern frontier to the capital to discuss the household tax for the Hu people."

The Hu people were bound to be unable to collect taxes in the same way as the Han people. The Hu tribes, who relied on nomadic life, needed to levy taxes according to local conditions. For example, they could collect taxes by the headman and officials, using the village or tent as the unit; or they could adopt a tax farming system, where the headman would contract to collect taxes and pay a certain number of cattle and sheep to the court each year, thus saving on collection costs.

The specific method of tax collection needed to be negotiated between the local and central governments. Zhong Yao was unfamiliar with Hu customs and was unable to preside over the meeting, so it was necessary to have someone familiar with Hu customs preside over and participate, such as Li Song, Ke Bi, and Yan Rou.

"promise!"

While Zhao Zi was drafting the edict, Jia Xu pondered for a moment and said, "Your Majesty governs many barbarian tribes, such as the Qiang and Di of Longyou, the Xianbei and Wuhuan of Daishuo, and the Xiongnu, Qiang, and Hu of Hexi. When Your Majesty took control of Liaodong, there were also the barbarians of Goguryeo and the Three Hans. In the south, there are also the Nanzhong, Wuxi, and Shanyue barbarians. The total number of barbarians is over one million. Therefore, Your Majesty wishes to govern the four barbarian tribes and collect taxes. I wonder if it is necessary to establish a special department with officials to govern them, or if the local prefects should be in charge?"

Zhang Yu paced back and forth for more than ten minutes, then said, “Wenhe’s words are not without reason. Many Hu people have submitted to the government, but different places have different Hu people, and their customs vary. There is no channel for talented people to pay tribute. If we want to make the four barbarians submit, it is difficult for the prefects to manage them alone. The court needs to send people who are familiar with the customs to govern them.”

“In the past, the Later Han Dynasty established special positions such as Protector of the Xiongnu General, Wuhuan Commandant, and Xianbei General to suppress the Hu people. However, the administration was left to the local prefectures and counties. The prefectural and county officials levied exorbitant taxes and oppressed the Qiang and Di people, which led to rebellions. Learning from the past, it is necessary to establish a special department to govern this, with a person in charge of two thousand shi (a unit of grain).

The Central Plains dynasties often felt a sense of superiority over the surrounding barbarian tribes, frequently entrusting their governance to local county officials. However, these local officials, unfamiliar with the customs and traditions of the people, often clashed with them. Therefore, Zhang Yu resolved to humble himself, acknowledge the local barbarian tribes, and have them governed by a centrally administered agency, in order to strengthen the cohesion of the surrounding barbarian tribes.

After a pause, Zhang Yu said, "Now, modeled after the Ministry of Personnel, we will establish the Northern Court, with Li Song concurrently serving as the Governor of the Northern Court, receiving a salary of two thousand shi (a unit of grain), and in charge of military, political, legal, and financial affairs of the four barbarian tribes. Officials in the Northern Court must be well-versed in the customs and traditions of the barbarians. The laws may differ from those of the Central Plains, but if anyone violates the Tang law, they will be punished according to the Tang law."

"Yes, sir!" Zhao Zi accepted the order. (End of Chapter)