My Portable Ming Dynasty

Chapter 404 Industrial and Mining Tax

Everyone fell silent.

Su Ze also sighed slightly.

This is a typical example of a mismatch between local financial power and responsibilities.

As the Provincial Governor of Guangxi, Cheng Zixue naturally had to do things for the Guangxi region.

However, everything costs money, and in the Ming Dynasty's tax system, most of the tax revenue was handed over to the imperial court in the capital.

Despite shrinking local revenues and a growing shortage of manpower, the Ministry of Revenue still required all provinces to pay their taxes in full.

In other places, we can also carry out land reclamation, target a few large households, and try to expedite the collection of taxes.

However, the situation in Guangxi was much more complicated, as the resistance to taxes came from chieftains who had soldiers and weapons.

What Cheng Zixue did was to do everything possible to expand local tax revenue and try to do something for the people of Guangxi.

After explaining all this, the problem was then passed on to the imperial court.

Zhao Zhenji coughed and said:
"The matters discussed today will be investigated and verified by the Censorate, and I will report to His Majesty."

When Grand Secretary Zhao spoke up and took charge of the matter to the cabinet, everyone breathed a sigh of relief.

This was not a matter that the officials present could resolve.

"Please return to the imperial prison, Lord Cheng."

Zhao Zhenji's tone became much more polite.

In the Confucian system, officials like Cheng Ziwen are always respected.

Su Ze knew that Cheng Ziwen was telling the truth, otherwise the Ming Dynasty's fate would not have been affected by his resignation.

From this perspective, Cheng Ziwen was indeed a good official who was loved and respected by the people of Guangxi.

Su Ze sighed. If even good officials have to resort to illegal methods to get things done, then that shows there's something wrong with the local system.

In fact, Guangxi's geographical conditions are not bad.

Guangxi has far fewer mountainous areas than Yunnan and Guizhou. The main problem is that water conservancy is not well developed, and floods are frequent.

In the original timeline, after several hundred years of development, Guangxi had become the granary of the south.

But as Cheng Ziwen encountered, if the current Ming Dynasty's financial system were followed and other officials were sent to Guangxi, Guangxi would still be unable to be developed.

Su Ze sighed, now it was up to the court to decide how to deal with Cheng Ziwen.
-
The court had not yet decided how to handle Cheng Ziwen's case, but Su Ze's memorial was approved at lightning speed.

This time, both the Six Ministries and the Censorate voluntarily kept quiet and stopped discussing the contents of the "Memorial on Eliminating the Abuses of Supervision and Censorship to Secure the Foundation of the Nation".

On June 27th, the Longqing Emperor approved the imperial edict, thus approving the memorial.

The memorial entitled "Eliminating the Abuses of Supervision and Inspection to Secure the Foundation of the Nation" was passed.

The Ming Dynasty's supervisory system began to enter a legal era, and investigations and impeachments of officials appointed to external posts became more formalized.

The impeachment and removal of officials now have clear procedures, and the court's punishment and reward of officials are more transparent, which has won the support of the people.

[National fortune +1.]

[Prestige value remains unchanged.]

[Remaining Prestige: 990]

The officials who had besieged the newspaper office finally dispersed. Su Ze closed the "Handheld Ming Dynasty Court" app. Just then, Shen Yiguan rushed into the newspaper office.

"Brother Zilin, how does the imperial court intend to deal with Lord Cheng?"

Su Ze shook his head and said:

"The cabinet has reviewed the relevant files, and the Censorate has summoned officials who had served in Guangxi for questioning. The content of Cheng Gong's confession in the Ministry of Justice is probably true."

Shen Yiguan asked:
"How will the imperial court deal with Cheng Gong?"

Su Ze shook his head and said:

"In any case, Cheng Gong has violated the Great Ming Code. Local officials soliciting bribes from chieftains and supporting conflicts between merchants and local chieftains must be accounted for."

Shen Yiguan paused for a moment. Su Ze was right. Cheng Ziwen's original intention was good, but the nature of the matter changed because he said it directly.

This is tantamount to Cheng Ziwen openly declaring war on the century-old system of the Ming Dynasty.

The relationship between the Ming Dynasty court and local governments has always been like this. The governors and viceroys have all lived this way for many years, and there are many officials who have risen from local positions to become the Grand Secretary of the Cabinet.

But none of them wanted to change.

Cheng Ziwen, by exposing all of this, the most embarrassed party will naturally be the imperial court.

Shen Yiguan also looked somewhat dejected.

Su Ze said, "His Majesty is a magnanimous person, and Cheng Gong's personal safety is assured, but demotion is probably inevitable."

At this moment, Luo Wanhua asked:

"But Cheng Gong is a good official who does practical things for the people of Guangxi. If such an official is punished, wouldn't that break everyone's hearts?"

Su Ze sighed and said:

"But if violating the law is rewarded, where is the authority of the law? If local officials follow suit, how can you tell who is acting out of public interest and who is acting out of personal gain?"

Luo Wanhua also fell silent. Just then, Guo Zhun, a secretary in the Imperial Secretariat, arrived at the newspaper office. It turned out that Gao Gong had summoned Su Ze to the cabinet for a meeting.

Su Ze roughly guessed the content of the meeting. When he arrived at the cabinet, he met Wei Yun, the head of the Commercial Tax Bureau.

Now Su Ze could basically guess why Gao Gong had summoned him.

Wei Yun had once been Su Ze's subordinate, and his current job was also recommended by Su Ze. He quickly bowed to Su Ze.

After Shuntian Prefecture began collecting commercial taxes, the imperial court established a Commercial Tax Bureau within the Ministry of Revenue, with Wei Yun appointed as its chief administrator.

Su Ze heard that the commercial tax collection work in Shuntian Prefecture was doing well, with particularly rapid growth in the past two years. Wei Yun had been commended many times and was about to be promoted.

The two had only been chatting for a short while when Guo Zhun led them into the cabinet.

All four cabinet ministers in the capital were in the cabinet, and Gao Gong and Zhang Juzheng looked displeased.

These days, Cheng Tzu-wen's case has put a lot of pressure on the cabinet.

In the beginning, it was the foreign officials who were attacking the cabinet, for allowing an official like Cheng Ziwen to serve as the Provincial Treasurer of Guangxi for a long time, which showed that the court had a problem with selecting talent.

After the Ministry of Justice defended itself, the tide turned again, and officials from the outer court began to attack the cabinet for failing to rescue Cheng Ziwen, thus causing a loyal minister to be unjustly accused.

The Gao Gong cabinet is also innocent.

The cabinet will definitely need to investigate Cheng Ziwen's claims in detail before reporting them to the emperor.

Guangxi is far from the capital; even by sea it would take more than half a month, and these investigations and evidence collections all take time.

The cabinet cannot possibly request the emperor to pardon Cheng Ziwen based on his one-sided statement; that would be far too frivolous!

Moreover, seasoned politicians like Gao Gong and Zhang Juzheng were well aware that the attacks on the cabinet by the outer court also stemmed from sentiments about fiscal policy.

However, financial matters are matters of ancestral law and cannot be attacked casually. The only way to deal with them is to use Cheng Ziwen as a moral benchmark to subtly circumvent the issue.

This put immense pressure on the cabinet. A short while later, Su Ze saw several more officials from the Ministry of Revenue. It seemed his guess was correct; the cabinet had summoned him to discuss the issue of fiscal revenue allocation.

Gao Gong cleared his throat and said:
"I have invited you all here today to discuss the issue of local revenue."

Gao Gong looked at Zhang Juzheng beside him.

Zhang Juzheng took out the accounting records and began to read out the fiscal revenue and expenditure situation of the previous year.

In fact, these figures had already been reported by major newspapers at the beginning of the year, and Su Ze had a general idea of ​​them.

In the fourth year of the Longqing reign, the Ming Dynasty's fiscal revenue increased significantly.

It can be said that the Ming Dynasty's finances had doubled by the time Emperor Longqing ascended the throne in the first year of his reign.

Of course, there's some exaggeration in this tax rate.

One of the major sources of revenue came from the seigniorage of the Dengzhou-Laiwu Mint.

One tael of silver minted into two silver dollars was almost like magic for the treasury, but the growth achieved in this way was not sustainable.

First, the Ming Dynasty, being a silver black hole, would devour the surrounding silver, and the low-cost silver supply would soon be exhausted.

Furthermore, the stable value of the currency today is due to the debts owed by the Ming Dynasty. Before the minting of coins in Dengzhou and Laizhou, the Ming Dynasty was in a state of currency shortage. These silver dollars accelerated the circulation of goods and met the needs of transactions, which is why they were able to be anchored to such a high value.

However, the demand for silver dollars is not unlimited. Once the number of silver dollars in the market reaches a certain level, the seigniorage will decrease.

Another major source of revenue was the maritime trade tax, but this money went into the emperor's private treasury.

Of course, Emperor Longqing was quite considerate of the outer court, and every year he would take a portion of the maritime trade tax to subsidize the outer court. The expenses of the Ming Dynasty Military Supervisory Bureau, the expenses of the new Beijing garrison, as well as the royal cement plant and steel plant, all came from this source.

The last thing to increase was commercial tax.

Although only two provinces and one prefecture levied commercial taxes, the growth of commercial taxes was still very encouraging, and this money was controlled by the Ministry of Revenue.

After Zhang Juzheng finished reading the income, he began to read the expenditure.

The imperial court collected more money, but also spent more money.

The number of personnel and their pay decreased after several wars, and the compensation for those killed in action also decreased, but military spending still increased.

The reason is simple: the current war in the Ming Dynasty has resulted in a huge consumption of military supplies, and the consumption of gunpowder has increased several times compared to before.

There were also various military equipment construction projects and naval development projects, all of which involved enormous expenses.

The expenses for officials, training, and education in the two provinces and one prefecture are also considerable.

There were also the construction of schools, the Yellow River and the Grand Canal projects, all of which were huge expenses. In the end, the Ming Dynasty's finances were barely breaking even.

All of this was the result of Zhang Juzheng's efforts as a financial expert, who strengthened auditing and reduced expenditures.

This explains why, despite Cheng Ziwen's memorial to the court, the Ministry of Works was unable to allocate funds to manage the Yong River.

Zhang Juzheng looked at the officials of the Ministry of Revenue and said:
"The matter of finance is nothing more than two things: increasing revenue and reducing expenditure. Reducing expenditure goes without saying. The imperial court has already piloted the payment of taxes in silver in Jiangnan, which can save the cost of transporting actual taxes to the capital."

"The purpose of this meeting is to discuss open source."

Immediately afterwards, Zhang Juzheng named Wei Yun, the Commissioner of Commerce and Taxation of Shuntian Prefecture.

Wei Yun, who was probably prepared, took out a document and began to read it.

"My lords, this is the situation of commercial tax collection in Shuntian Prefecture last year."

Wei Yun gave a brief report on the collection of commercial taxes in Shuntian Prefecture last year, and even Zhao Zhenji, who was not usually interested in commercial taxes, exclaimed in surprise:
"so much?"

Wei Yun said:

"Grand Secretary Zhao, Shuntian Prefecture has a lot of commercial taxes, and it also has the advantage of the capital being the distribution center of the northern market. Several large markets in the capital pay a lot of taxes every year."

"In comparison, Shanxi and Shandong also saw growth, but it was much less than that in the capital."

"Currently, the commercial taxes collected in Shandong and Shanxi are not enough to balance the revenue and expenditure for the reform of the civil service and the education system, and the imperial court still needs to provide subsidies."

After hearing Wei Yun's words, everyone present frowned.

All eyes fell on Su Ze.

Promoting commercial taxes is something Su Ze has been working on, but it seems that the effects of commercial taxes are not as good as expected.

Su Ze understood what was going on.

The commercial tax of the Ming Dynasty today is actually more accurately described as a commodity circulation tax.

The main body responsible for collecting commercial taxes was the merchants who traded goods. As a result, the more developed a region's commerce was, the more commercial taxes it could collect.

This is why the Jiangnan region strongly opposes the imposition of commercial taxes. Jiangnan is currently the most developed region in the Ming Dynasty, and if commercial taxes are levied, Jiangnan will definitely suffer the most.

"Zilin, you were the one who proposed the commercial tax. Now, you can explain your thoughts."

Gao Gong looked at Su Ze and called on him to answer the question.

Su Ze cupped his hands in greeting and continued:

"My esteemed ministers and lords, our Great Ming Dynasty has a surplus in commercial taxes, but it has not collected enough industrial and mining taxes."

"Labor tax?"

Everyone looked at Su Ze.

Su Ze said:

"The mines in Shanxi, the factories around the capital, and the workshops in Zhigu and Shandong—aside from the state-run factories that hand over profits to the Ministry of Revenue—created wealth but were not taxed."

"Factories have already made a profit by selling goods to merchants, so why should only the merchants who sell goods be taxed, but not the factory owners?"

After Su Ze finished speaking, everyone began to think about it.

In fact, far-sighted politicians like Gao Gong and Zhang Juzheng had already realized that mine owners and merchants in the traditional sense were completely different species.

Mining and industrial owners are more like landlords. They use their mines and factories as land to continuously produce wealth, yet the existing system does not tax them.

Su Ze said:

“Farmers cultivate the land and the court collects taxes; merchants transport goods and the court collects market taxes and station taxes; but industrial and mining owners are not taxed.”

However, some people realized the problem. For example, Zhang Juzheng frowned and said:

"If a good is taxed as soon as it is produced, and then taxes are increased during transportation and sales, isn't that unfair to people who live far from the place of production? If a good is taxed several times, isn't that also exploiting the people's labor?"

Good heavens, he even thought of double taxation; no wonder he was Zhang Juzheng.

Su Ze couldn't help but sigh, wondering how he could have shared the stage with these top elites of the Ming Dynasty without the system.

Zhang Juzheng's talent in finance was too great!
However, later generations had already found a solution to this problem, Su Ze said:
“What Grand Secretary Zhang said is absolutely right. If a commodity is taxed twice, it will ultimately be the ordinary people who have to pay the tax, which will be a burden on them.”

"Therefore, I believe that after the mines and factories pay their taxes, the tax payment certificate can be divided into three copies: one copy is kept by the mine owner as proof of tax payment; one copy is kept by the local tax official as proof of tax collection; and the last copy is given to the merchant who transports the goods, indicating that the goods have been taxed and thus exempt from the toll and market taxes along the way."

Zhang Juzheng thought about it and felt that Su Ze's method was feasible.

But then he raised another question:
"In this way, wouldn't the imperial court's tax collection remain almost the same as before, while also incurring additional manpower costs?"

(End of this chapter)