Taichang Ming Dynasty

Chapter 723 The Audience (Part 2)

Wang Yingjiao felt uneasy under the emperor's gaze, which held a mixture of joy and worry. Just as he was about to lower his head, Ye Xianggao, who had recovered from his initial shock, suddenly coughed lightly and said, "Regarding commercial taxes, I have a memorial to present, and I humbly request Your Majesty's permission to revise it." Ye Xianggao stood up and bowed to the emperor.

The emperor turned his gaze to Ye Xianggao: "Minister Ye, please speak."

"Your Majesty is wise." Ye Xianggao bowed with his tablet in hand and said, "As far as I know, local officials set up checkpoints to collect taxes on their own, which is indeed due to the problems of poor governance and embezzlement. But at its root, there are also unavoidable difficulties."

"The reason?"

“Local affairs are numerous and complex, with considerable expenses. These include spring and autumn sacrifices, tuition fees for official schools, disaster relief, river and water conservancy projects, bridge repairs, and even the wages of clerks and the remuneration of laborers. Relying solely on regular taxes and levies is simply insufficient,” Ye Xianggao said. “If all these miscellaneous taxes were abolished, local affairs would likely fall into disarray, malfunction, and harm the people’s livelihood. Therefore, I earnestly request Your Majesty to carefully consider and weigh the pros and cons.”

Zhu Changluo listened quietly, his face expressionless, only nodding slightly: "These are the words of a wise and experienced ruler. It is indeed true that local funds are tight." He paused briefly, his fingertips unconsciously stroking the smooth rosewood armrest, "However, insufficient government budget is absolutely no reason to condone local tax collection. In fact, it is precisely because of these numerous malpractices that the need for clarification and reform is all the more apparent. Blindly indulging and appeasing them will not only be of no benefit to the court, but will also breed corruption, accumulating small problems into major troubles. If this continues, the people's strength will be depleted, the foundation will be shaken, and this is by no means a way to achieve long-term stability."

Ye Xianggao, being exceptionally perceptive, immediately realized that the emperor, as before, must have already made up his mind. He remained outwardly calm, only respectfully inquiring, "May I ask Your Majesty's decision?"

“Follow the logic and go with the flow.” Zhu Changluo leaned forward slightly, his gaze sweeping over the three senior officials. “Since the local government’s budget is insufficient, then increase the local government’s budget.”

"May I ask where this additional budget will come from?" Ye Xianggao then asked.

“Of course, it’s the local taxes,” Zhu Changluo said. “It’s true that the local government’s budget is insufficient. It’s also true that the local government has imposed exorbitant taxes on the local people through various means and under various pretexts. But I don’t believe that the local government has collected every tax that should be collected. I don’t believe that every tax they are collecting now is due, and I don’t believe that all the taxes collected are used for the important matters that you just mentioned, Minister Ye.”

"So what we need to do now is to collect all the taxes that should be collected, waive the taxes that shouldn't be collected, and then take a portion of that money to subsidize the necessary expenses of local government operations. Instead of simply condoning and indulging them."

A hint of understanding flashed across Ye Xianggao's eyes, but he was still puzzled. He frowned slightly, pondering the emperor's words: "Does Your Majesty mean to first clarify the local tax revenues, then approve the expenditures of local governments, and after collecting taxes, offset the revenues and expenditures, with any surplus being turned over to the imperial court?"

"Yes, but not entirely." Zhu Changluo said calmly, a slight smile playing on his lips.

"Please enlighten me, Your Majesty," Ye Xianggao said respectfully.

"After the taxes are collected, part of them are kept locally for expenditure, and the other part is sent to the imperial court. This is good. However, these taxes are not collected by local governments themselves, and the surplus is settled and handed over to the imperial court. Instead, the imperial court collects them uniformly and then distributes them to local governments for expenditure."

Zhu Changluo paused, then emphasized, "Specifically, the Ministry of Revenue will select officials to establish branches of the Ministry of Revenue in all prefectures and counties throughout the country, specifically responsible for the collection and disbursement of taxes. After collection, the portion to be retained will be allocated to local governments according to the pre-approved local budget, for designated use only. The remainder will be turned over to the capital and incorporated into the national tax. In this way, unified tax collection and tax sharing between the central and local governments will ensure clear revenue and expenditure, which will not only alleviate local difficulties but also prevent embezzlement."

After a moment's thought, Ye Xianggao quickly understood the key to this design—taxation power was centralized in the hands of the imperial court, and the allocation of funds was also controlled by the court. What local governments received were approved and guaranteed funds, rather than the power to levy taxes on their own.

After thinking it through, a new question arose: "If we do this, wouldn't we have to set up Ministry of Revenue offices and station officials in every prefecture, state, and county in the country? If it's just for collecting commercial taxes, isn't this a bit too much of a fuss?"

Zhu Changluo stared at Ye Xianggao in silence for a moment. "Tsk. I hadn't originally planned to bring this up today, but since we've come this far, I'll say it all. That's right. I intend to establish Revenue Departments in every prefecture and county throughout the land, specifically to manage local taxes. These taxes won't be limited to commercial taxes. All national taxes, whether land tax, commercial tax, salt tax, or miscellaneous taxes converted into silver, will be under their jurisdiction. However…" Zhu Changluo licked his slightly dry lips…
"It's not necessary to station officials from the Ministry of Revenue in every county. For prosperous and bustling counties with abundant tax revenue, a branch office can be set up and officials can be stationed there. For poor, remote, and sparsely populated small counties, the tax collection can be handled by the branch office of the Ministry of Revenue at the prefectural or state level. As for which taxes to collect and how much to collect, the Ministry of Revenue, together with officials at all levels, should determine these based on the actual conditions of each place. In this way, we can not only adapt to local conditions and live within our means, but also increase the national treasury's revenue."

Wang Yingjiao, being the Minister of Revenue in Nanjing, had his eyes light up upon hearing this plan. If the fiscal and tax system reform could be implemented according to this idea, it would completely change the previous complex and chaotic situation, concentrating the power of fiscal and taxation in the Ministry of Revenue like never before.

His lips moved slightly, as if he was about to speak, but Grand Secretary Fang Congzhe beat him to it, straightened up and cupped his hands, saying, "Your Majesty, I have a memorial to present."

"Please speak freely, Mr. Fang." Zhu Changluo nodded slightly and leaned against the armrest closer to Fang Congzhe.

Fang Congzhe's voice was as steady as ever: "According to past practice, if it was necessary to expedite the collection of grain from a certain county or several counties, a sixth-rank official from the Ministry of Revenue would be dispatched to the local area to oversee the grain transport. If it was necessary to expedite the collection of grain from a prefecture or state, a fifth-rank official from the Ministry of Revenue would be dispatched to the local area to oversee the grain transport. At the provincial level, or in the event of a major incident like the rebellion of the slaves, the Vice Minister in charge of grain transport or even the Minister in charge of grain transport would be directly dispatched to a specific location to command all directions and manage the grain transport. Both the officials in charge of grain transport at various levels and the Vice Minister in charge of grain transport could issue warrants to the local administrative offices."

"In other words, at least in matters of provisions and pay, the officials of the Ministry of Revenue dispatched to local areas were superiors of the local administrative offices. If this precedent is followed, and officials of the Ministry of Revenue are stationed in local areas to establish branch offices, how should these branch offices interact with the local administrative offices?"

“For example,” Fang Congzhe said, “if in a wealthy county, a sixth-rank official from the Ministry of Revenue is stationed to oversee a branch office, while the county magistrate is only a seventh-rank official. In that case, will the county magistrate obey the branch office official, or will the branch office official obey the county magistrate? If the responsibilities are not clear, conflicts may arise, which could hinder the smooth implementation of government orders.”

“These are also the words of an experienced strategist.” Zhu Changluo swallowed, his voice a little dry. “However, I have also considered what you have said. I believe that the relationship between the Ministry of Revenue and the local administrative offices should be similar to that between the Provincial Administration Commission and the Provincial Surveillance Commission—complementary but not subordinate to each other. The Ministry of Revenue is subject to the supervision and leadership of its superior, the Ministry of Revenue, and the censors of the Ministry of Revenue, and is responsible for matters such as the transportation of taxes and grain, storage in treasuries, statistics and auditing, and accounting. The local administrative offices, on the other hand, are still responsible for local administration such as tax collection, spring and autumn sacrifices, public security and education, and construction projects.” “In other words,” Fang Congzhe frowned slightly, almost using all his brainpower to understand the emperor’s meaning, “this dispatched Ministry of Revenue is not responsible for collecting taxes and grain in various places, but plays more of a supporting role?”

“That’s right. The collection of various taxes will still follow the old practice, with the local administrative offices carrying out the specific tasks.” Zhu Changluo nodded. “To put it more bluntly, the lower-level Ministry of Revenue offices are only responsible to the higher-level Ministry of Revenue offices, and are guided and led by their superiors and the Ministry of Revenue in the capital. They implement the tax revenue plan formulated by the Ministry of Revenue in the capital at each level. At the local level, they only care whether the administrative offices have completed the tax revenue plan drafted by the Ministry of Revenue.”

"Besides tax collection, the Ministry of Revenue shall not interfere in the daily affairs of local administrative offices. If the Ministry of Revenue and local administrative offices have disagreements on matters such as tax amounts, collection methods, or local budget accounting, both parties may submit written reports to the higher-level authorities for resolution. If a resolution cannot be reached, the Provincial Administration Commission and its provincial branches may submit reports to the Ministry of Revenue, which will then discuss the matter in conjunction with the Ministry of Revenue Department and the Cabinet, or I may make a personal decision. As for ranks..." Zhu Changluo took a cup of warm water from Wang An, drank it, and continued:
“A county-level sub-bureau can be designated as an eighth or ninth rank official; a prefecture-level sub-bureau can be designated as a sixth or seventh rank official; and a prefecture-level sub-bureau can be designated as a fifth or sixth rank official.”

Zhu Changluo once considered separating all tax-related work, including tax collection, from the administrative system. However, upon closer examination, he felt that given the existing economic foundation of the Ming Dynasty, this step might be too drastic.

Although the Ming Dynasty had its share of industrially and commercially developed areas, it was still primarily an agricultural country with a small-scale peasant economy. Despite the Single Whip Law changing the collection of land taxes from in-kind to monetary form, the fundamental process of collecting and transporting summer and autumn taxes through government offices and hierarchical levels remained unchanged. Tax collection at the grassroots level involved clerks in charge of grain going down to villages and communities to collect taxes according to the records in the imperial tax registers.

In other words, the primary task of a county-level government office was to collect summer taxes and autumn grain rations and then submit them. Separating the tax collection function directly would be tantamount to cutting the county government's functions in half. Therefore, after careful consideration, Zhu Changluo decided to limit the functions of the Revenue Department to statistics, auditing, and supervision, and its administrative level should be lower than that of the local administrative office.

“In that case, the county-level household registration department should be staffed with officials holding the titles of 'meticulous official' or 'inspector',” Wang Yingjiao said.

"Don't be so rigid. Can't you create some new official titles?" Zhu Changluo handed the teacup back to Wang An, then swept his hand around in front of him.

"A new official position?" Wang Yingjiao was subconsciously puzzled by the emperor's actions, but he quickly realized that the emperor was having the eunuchs serve them a cup of water as well.

“Since these government offices were set up to regulate finance and taxation, let’s start them with the words ‘finance and taxation’,” Zhu Changluo said with a smile. “At the county level, they’re called the Finance and Taxation Department, and the head official is the Director; at the prefecture level, they’re called the Finance and Taxation Bureau, and the head official is the Bureau Chief; at the provincial level, they’re called the Finance and Taxation Hall, and the head official is the Hall Chief. The deputy is two ranks lower than the head official, so we can just change the title from ‘head’ to ‘deputy’.”

Fang Congzhe took the water from the eunuch's hand, thanked the emperor, drank it, and then asked, "Your Majesty, are the officials of these three levels of departments also appointed and dismissed through the procedures of the Ministry of Personnel?"

“Of course, since they are civil officials, they should be appointed and dismissed by the Ministry of Personnel,” Zhu Changluo said matter-of-factly.

Fang Congzhe bowed again: "Your Majesty, according to custom, officials of the eighth or ninth rank, such as county magistrates, registrars, and clerks, are appointed and dismissed by the Provincial Administration Commission. The Ministry of Personnel merely records the appointments and usually does not interfere with the specific selections. However, you just mentioned that the county-level finance and taxation commissioner is no higher than the eighth rank and no lower than the ninth rank."

“Then we’ll make an exception.” Before Fang Congzhe could finish speaking, Zhu Changluo interrupted, “Even the county-level Finance and Taxation Department is a department of the Household Revenue Department. If it’s appointed and dismissed by the Provincial Administration Commission as usual, wouldn’t it become a subordinate official of the Provincial Administration Commission?”

“Your Majesty is wise!” Fang Congzhe continued, “Then from whom will the officials of the Finance and Taxation Department be selected?”

"Who else could it be but scholars, of course?"

"What I would like to ask is, from which scholars were they selected?"

What exactly do you mean?

"Your Majesty," Fang Congzhe said, "the Ministry of Personnel usually selects officials only from among the Jinshi graduates. The starting point for a Jinshi graduate's official career is usually a seventh-rank county magistrate. The rare eighth-rank officials are usually officials in the capital, such as the Xingrensi (行人司) officials. If the Ministry of Personnel were to select the eighth or ninth-rank officials, such as the Sizheng (司正) and Sifu (副), from among the Jinshi graduates to assist the county magistrates in the local areas, it would probably not be very appropriate. Moreover, the regular imperial examinations are held every three years, and each session can only produce three or four hundred people at most. If some of them were to be appointed as the Sizheng and Sifu at the county level, there simply wouldn't be that many talented people."

"This..." Zhu Changluo hadn't actually thought about this question. "Fang Qing, do you have any brilliant ideas?"

"The supplementary list." Since Fang Congzhe dared to ask the question directly, he wasn't afraid of the emperor's counter-question. "I believe that those who passed the supplementary list of the metropolitan examination could be appointed as directors or deputy directors of the finance and taxation departments in various regions."

"The supplementary list," Zhu Changluo pondered, "are those people who are listed separately from the main list but do not participate in the palace examination?"

“Yes.” Fang Congzhe finally found his footing in giving advice, and he stood up straight. “According to custom, these candidates who passed the supplementary examination can either continue to participate in the next metropolitan examination or be directly appointed as local educational officials. I think it would be most appropriate for them to be appointed as low-ranking officials under the Ministry of Revenue who are sent to other regions.”

"Okay. Let's do it that way."

(End of this chapter)