Taxation in Aelyria

"There is no more convoluted or complicated a tome in all of the empire; the Imperial Tax Code contains provisions for almost any imaginable circumstance of levying taxes upon the subjects of Aelyria. Yet, despite its levels of confusion, how simple and beautiful it became when the Third Empire began to witness its decline in consequence of failure to collect the funds. For, without the taxes collected from the provinces and municipalities, the nation stood still and its services became silent, from the Imperial Army's desertion to the dismissal of the Imperial Court." -Lord Ortorius, Imperial Chronicler, "Demise of the Alyssan Civitate"

Taxation in the Aelyrian Empire

The Aelyrian Empire was formed through brutal conquest and the establishment of a new civilized world order. Yet this undertaking was not inexpensive; to the contrary, collecting taxes was a way of life experienced by all facets of Aelyrian society since the early days of the fledgling Aelyrian Kingdom. Under the Feudocratic Compact, the Aelyrian King would demand of his nobles a certain sum of money and it would be left up to the devices of the nobles the fashion of how such a demand might be met. The same principle carried over into the Aelyrian Empire; an explicit objective would be declared by the Imperial Government, and the provinces would be left with the broadest discretion in determining how the funds would be raised.

Though the Articles of Imperium, the Constitution of the Aelyrian Empire, mandate that the Imperial Treasurer is the highest ranking financial officer in the empire, the daily operation of the fiscal order in Aelyria falls to the Lord Exchequer and his Ministry of Finance. A fierce network of tax collectors and imperial auditors enforce the fiduciary policies of the Aelyrian Empire through the strict application of protocols contained within a bound periodical tome, the Imperial Tax Code. Though the agents of the Ministry of Finance assist the provinces in the collection of their taxes, it is ultimately left to the arbitration of the provinces themselves as to the fashion in which taxes are met, and can often times seem unfair. This has often led auditors to lead stressful and unpredictable lives, with many of them quitting their posts for fear for the welfare of their immortal souls.

Taxation is usually a matter of necessity or opinion. Usually, the Emperor receives advice from the Imperial Treasurer suggesting that funds would be necessary for an undertaking; or, as is almost always the case, the Lord Exchequer, to whom the responsibility of carrying out the policies of the Emperor and his Imperial Court falls, would initiate a order calling forth for the raising of taxes. Alternatively, the Imperial Senate may specifically call upon the Lord Exchequer to raise taxes for an undertaking. Under all circumstances, the levying of taxes is executed ultimately with the Emperor's consent. When the decision to levy taxes has been made, the Lord Exchequer then apportions either fixed sums or some formulaic expression of a quota that must be filled by each province. Often times, some provinces are more heavily taxed than others, at the discretion of the Lord Exchequer. This power has been rarely abused in history to punish uncooperative provinces and localities. Then, the provincial government responsible must then decide how to meet its imperial obligations.

Methods of Taxation

Under the Alyssan Civitate, each province has its own charter of customs and traditions within the political framework of the Articles of Imperium. Beside the charter usually can be found an accompanying tax code that articulates the preferred methodology of taxation. Often times, governors and their cabinets make hasty adjustments of the tax code, but there are even instances of some provinces issuing ad hoc decisions for the situational levy of taxes. After all, each province is unique and may experience different circumstances when it is called to account for funds for the empire. Available to the province is a wide arsenal of methods of taxation designed to creatively assist in the collection of revenue.

Levies

Dating back to the Feudocratic Compact, local lords usually levied taxes upon citizens; a rather imprecise method, levied taxes were usually necessary to raise a large sum of money rather quickly and used most often in times of emergency. Levying taxes implies that tax collectors travel about the countryside and demand that citizens contribute a percentage, or fixed sum, of all of the money that they presently own. This method is often prey to use of the "statutory assessments", wherein the tax collector seemingly fabricate a figure based upon limited information given the rushed schedule of collecting these funds. In the early kingdom, tax collectors were typically bribed by wealthy aristocrats and the poor ended up being forced to fit the bill. It is unlikely that this would happen in most cosmopolitan areas of Aelyria, however, because the empire has strict laws against the injustice of inequitable collections.

Exchange Tax

Lord Exchequer Veldar, often considered the father of Aelyrian Economics, formulated the Exchange Tax during his lengthy tenure as Governor of Centripax Province. Often considered the standard of how most provinces raise their revenues over time, shoppekeepers and merchants are taxed between five and fifteen per cent of their gross revenue on any transaction or sale. This figure also became the standard charge for most financial services, such as currency exchanges. It is often the unspoken yet public practice that shoppekeepers and practitioners pass along the Exchange Tax directly to their customers, thereby making patrons pay more to cover the taxed expense.

Land Tax

Following the collapse of the Second Empire, resentment towards the nobility became so commonplace that the early local authorities that replaced the aristocrats implemented the infamous Land Tax. Though unpopular among the wealthy, it was extremely effective, and constituted essentially a periodic (usually, yearly though often times seasonal) tax on any land that was owned. Later on, this was extended to include general property and possessions. Persons had to pay a small percentage (usually between three to five per cent, though in difficult times it might go up to ten per cent) of the total value of land owned. Failure to pay the tax, for whatever reason, gave license to the local governing authorities to seize the land and use it as payment in kind. This threat remained a powerful incentive for the grumbling wealthy to pay their taxes. Several years into the Third Empire discouraged the use of this land tax, and the Tribunal of Justice later ruled taxes on personal possessions to be unjust. However, provinces have still used from time to time a tax on land to avoid punishing the masses while still meeting their financial commitments.

Profit Tax

Under the High Queen Melody de Lylles, the Aelyrian Empire introduced a profit tax which was levied periodically on all citizens of the Aelyrian Empire. In order to raise the capital, the High Queen ordered all provinces to execute the Profit Tax once a year for four years and the results were promising and rewarding. In a Profit Tax, individuals who are subject to it must pay a percentage of their net income from all sources of revenue. This usually took into account the fact that different individuals had differing expenses. The High Queen used a flat profit tax of roughly eight per cent, but since then, it has been periodically used by more sophisticated provinces between five and twenty five percent of all revenue, with the most common figures in the lower teens.

Transport of Taxes

It would not be unusual for the provinces to in effect pass a variety of tax measures and tax different localities with unique methods. There are some cases of provinces even acting much like the empire itself, in that they would require fixed sums or percentages from localities, and then allow the municipal governments of cities and villages to institute their own taxation methods. In all circumstances, however, once the taxes had been raised, the funds were usually taken by treasure caravan to the provincial capital, and from there it would go to Aelyria Prime for entry into the Imperial Treasury and dispersal at the decision of the Imperial Government.

Consequences of provinces not paying their taxes have been relatively inconsistent throughout history. In the early kingdom, when nobles failed to pay their taxes on their fiefdoms and houses, the king would consider such an abrogation of their responsibilities under the Feudocratic Compact, and would then declare their powers, their lands, and their titles null and void. Yet into the Aelyrian Empire, as houses of nobility began to assert themselves with private armies and their own mechanisms of persuasion, it often took martial force to provide the appropriate incentive for compliance. When the province of Enamoria refused to pay its taxes in the early years of the Third Empire, likely to test the limits of the new empress at the time, Empress Alyssa Chrysinaria led the imperial legions to occupy Medonia and forced a taxation in the region.

For without taxes, the Aelyrian Empire might cease to function. Most imperial institutions required funding for the elaborate bureaucracy that powered it, and the expensive military that protected the borders and enforced the sovereignty of the nation. The collapse of the Third Empire is attributed partly to the unwillingness of the imperial regency to collect taxes through brute force. Later historians and economists would argue that the use of brute force to collect taxes throughout the empire was precisely what was needed, and so, following this incident, the Empire would impose a rare Direct Tax whereupon it would send out its own tax agents and bypass the usual autonomy of the provinces. After all, the provinces and cities themselves were administrative conveniences of the emperor, and the primary responsibility of the Ministry of Finance was to ensure the continued flow of the golden Crowns and silver coins.