Chapter 519 Tax Reform 4 Stepped Tax Rates

Chapter 519 Tax Reform 4 Stepped Tax Rates

“Or ……”

Paul swept the officials of the departments present one by one with his gaze.

“Should we cut a department’s budget?”

A silence fell over the conference room.

“No. Lord Gladman.”

Hansel was the first to break the silence, “I think the abolition of the charter system is imperative.”

“Yes, the old system is outdated.”

“We unanimously agree with Lord Gleeman’s wise decision.”

The others also responded.

Cutting departmental budgets? This was simply intolerable, the Council of State was expanding rapidly right now, everyone was desperately trying to get work for their departments to emphasize their importance, not without an adequate budget.

Who wants to be benched with a shrinking budget? Obviously, no one here would.

Let’s just let the countryside landlords lose their skin in comparison.

As a matter of fact, Count Gleiman’s deep distaste for the package tax system was already well known in the Council of State, and the Count had expressed his distaste many times in different places and at different times, so his decision today didn’t make everyone feel too sudden.

However, Hansel quickly realized a problem, even if the tax wrapper system was abolished, would it be possible to collect more taxes?
“Lord Gleeman.”

He cautiously raised his question, “Could it be that you want to raise the tax rate?”

Paul asked back blankly, “Raise the tax rate?”

Hansel made an assumption, “For example, each head in the territory needs to give 100 copper shields to the lord, when the tax wrapper was around, each person collected 110 copper shields, he gave 100 of them to the lord’s house, and kept the remaining 10 copper shields for himself, now that you abolished the tax wrapper, and directly levied 100 copper shields, but looking at it from our side. actually end up getting just as much as before the abolition of the tax wrapper.”

Paul laughed harshly as he pointed his finger twice in Hansel’s direction and said, “That is indeed a problem. Fielding, my tax director, what do you think?”

Fielding considered for a moment, then explained to the crowd, “Sir Abbott’s misgivings are valid, but the theory is that without the tax wrappers exploiting the middle, the populace will have more money left in their hands, and that extra money stimulates their desire to consume, which in turn contributes to the prosperity of the marketplace, which means that more merchandise will be in circulation, as well as more products being made, and that we have more money to tax in commerce and industry.”

So it was, and many people understood in their hearts.

“The abolition of the tax-packers was only the first element of the reform.”

Paul continued, “The second element of the reform is to change the capitation tax to a property and income tax.”

Poll tax, this everyone knows, the people in the territory, no matter male or female, old or young, rich or poor, counted by head, and everyone has to pay a certain amount of property, this is the most stable and basic tax source for the lords all over Aldo and even for His Majesty the King, so the amount of population in the territory determines whether a lord is powerful or not, and the king’s direct territory has the most people in it, so the king is the strongest of the whole country’s “Lords”.

It’s just that Alda has been vigorously developing commerce and industry in recent years, taxing the goods and manufactures circulating in the city, so it’s allowed the poll tax here to drop to a less conspicuous position-people can’t be made in a constant stream like products in a workshop, after all, but the poll tax is still one of the Council of State’s important tax sources.

As for property tax, in fact, this era has also existed, and very common, you live in the house to pay taxes to the lord, you planted the land to pay taxes to the lord, you inherited your parents’ property to pay taxes to the lord, and even livestock tax, window tax, stove tax and so on the messy tax, some territories and even you raise a cat or dog have to pay taxes to the lord. When Hansel first worked under Paul, a very important job was to check the property in the territory, for which he offended a lot of people.

Paul, after having commerce and industry as an important source of tax, eliminated most of them which he found ridiculous, and kept only a few taxes such as land tax, property tax, inheritance tax, etc., which was an important reason why Alda was able to attract stragglers more than other territories.

As for the income tax, this was the first time the people here had heard of it. Paul explained to everyone, that is, according to the individual or group income profits to tax, such as wages, salary income, industrial and commercial households, production, business income, contracting, leasing income, income from labor compensation, interest, share dividends, property leasing income, income from the transfer of property and so on and so forth.

“In the future, all of you here, as well as your ministers, will have to pay taxes on the salaries they receive in their positions.”

Paul began by giving everyone a heads up.

Old Ford said with some concern, “This may cause some people to have a grudge against Lord Gleeman, so everyone should set an example and psychologize the staff in their own departments and pay more attention to what they say.”

“That’s going to be a lot of tax money!”

Hansel made a rough estimate in his mind and couldn’t help but be a little staggered. But yes, Count Greiman had canceled so many miscellaneous taxes and poll taxes, now that he was in financial trouble what happened to compensating in other areas.

Wait, but the poll tax was canceled ah, whether this income tax can fill the loophole and realize the tax revenue growth, still have to draw conclusions in practice.

Not only Hansel, every participant in the heart of the similar doubts, if the property tax and income tax can not fill the loss of the abolition of the poll tax, then it is not more than worth it, even if it can be equal with the poll tax, it is only a name, the reform of the significance of what.

Count Greiman must have other means.

“There is a third element to the reform!”

Unsurprisingly, Paul continued his announcement.

“Whether it’s property taxes, or income taxes, we’re going to have stepped rates from now on.”

Stepped tax rates?
This was the first time anyone had heard this description.

Everyone looked puzzled, except for Myron and Old Ford, who had agreed with Paul on the content of the reform.

“Let me expound on it for everyone.”

Paul explained to the crowd while observing everyone’s demeanor.

“Take the income tax of an individual for example, a person’s income is the amount of tax he pays, if he doesn’t earn more than 1 silver guilder a month then he doesn’t have to pay any tax, if he earns between 1 and 5 silver guilders a month then he has to pay 2% tax, if he earns between 5 and 10 silver guilders a month then he has to pay 5% tax, if he earns between 10 and 20 silver dongs, then he has to pay 10% tax, if he earns between 20 and 50 silver dongs per month, then he has to pay 20% tax, and if he earns more than 50 silver dongs per month, then he has to pay 40% tax.”

“In short, it is a laddering of incomes, with different tax rates set for each ladder, with those with low incomes paying less tax or even no tax, and those with high incomes paying more tax, and the more they earn the more share they have to pay.”

“Of course, the tax brackets and tax rates in my example above are made up off the top of my head for illustrative purposes, and how exactly this bracket should be divided, and how many tax rates should be set for each segment of the bracket, will need to be studied in detail by the tax department before a conclusion can be reached.”

As soon as Count Greiman’s words fell, the minds of the people in the audience roared as if something had exploded.

(End of chapter)