My Portable Ming Dynasty

Chapter 405, "A Memorial Requesting Tax Allocation to Alleviate Local Financial Difficulties"

Zhang Juzheng's question precisely addressed the concerns of everyone present.

What benefit does Su Ze's overly complicated tax system bring to the Ming Dynasty?

Even Gao Gong looked at Su Ze.

Su Ze paused for a moment and then said:
"Admittedly, levying commercial taxes in this way will further increase the expenses of officials and require more professional officials, but there are two advantages to this."

"Firstly, the tax revenue comes from the local area."

“In the past, Shanxi coal would be taxed when it was transported to the capital. Commercial taxes were also collected by Shuntian Prefecture. Shanxi itself could not collect taxes, but the local government was responsible for managing the coal mines. If a mining accident like the one in Fangshan occurred, the local government would be held accountable.”

"As a result, local officials will lack the incentive to mine, and will instead restrict coal mines."

“If tax revenue is collected locally, it will be considered a measure of local officials’ performance, and local officials will be more open-minded.”

Everyone nodded.

Officials are driven by political achievements.

What every official needs most is a record of achievements.

As Su Ze said, after the Fangshan coal mine incident, the Fangshan county magistrate was held accountable, which resulted in the closure of coal mines in many parts of Shanxi.

Political achievements have nothing to do with me, but if something goes wrong, I'm expected to cover it up. No official would be willing to take that risk.

Su Ze continued:

"Secondly, it was to equalize the tax burden. All four classes of people pay taxes, and mine owners are also part of the merchants. Their mines and factories are just like those of landowners. There is no reason why landowners should pay taxes while mine owners do not."

"Businesses have business ethics. When mine owners pay taxes, they also assume their responsibilities."

Zhang Juzheng nodded in agreement; Su Ze's reasoning was quite sound.

Seeing that everyone understood, Su Ze brought up what he really wanted to say, steer the conversation back to the issue that had been discussed earlier: the source of funds for the imperial court and government.

"Distinguished ministers, esteemed officials."

"In my opinion, taxes on industry, mining and commerce should be shared between the central government and local governments."

"In order to encourage local industries and commerce, the central government can make a three-point agreement with the local governments, and for the three years when industrial and mining taxes are levied, the majority of the industrial and mining taxes will go to the local governments, and the smaller portion will go to the central government."

"After the three-year term expires, the local government and the central government will split the profits equally."

"In this way, the local area will have the motivation to develop industries and can also solve the predicament of tight local finances."

After finishing speaking in one breath, Su Ze stopped and looked at everyone's reaction.

As expected, everyone fell silent.

Su Ze sighed inwardly.

Throughout history, the relationship between the central government and local authorities has always been extremely difficult to manage.

The two most important rights of an organization are the power to appoint personnel and the power to manage finances.

It could even be said that financial power is sometimes more important than personnel power.

Because in a large organization, only a few people can rise to leadership positions; most people spend their entire lives striving for a certain rank, which is essentially about getting better treatment.

Public finance is not just a matter of money, but also a matter of power.

The reason why the regional military governors were so powerful during the Tang Dynasty was that during the An Lushan Rebellion, the central government lost control of local finances, which allowed the local military governors to become too powerful.

Therefore, starting from the Song Dynasty, local fiscal power has been restricted.

The reason why Emperor Taizu Zhu Yuanzhang required all taxes collected from across the country to be sent to the capital was to weaken the financial power of local governments and firmly control the financial power in the hands of the imperial court.

In the original timeline, this system did not collapse until the end of the Qing Dynasty, after which the Southeast Mutual Protection Pact emerged.

There's no way around it; the relationship between the central government and local authorities has always been one of either stifling growth if controlled too much or causing chaos if left unchecked.

But now is a good time.

Now that the Ming Dynasty is free from powerful external enemies, it is not under military pressure and can focus entirely on internal affairs.

The imperial court has just trained a new army, which is at its strongest in terms of combat power. There will be no situation like that at the end of the Tang Dynasty, where local forces relied on military force to challenge the central government.

Steel mills, chemical plants, mining operations, wool mills—all kinds of new technologies are emerging.

With ample money supply, commercial activities began to flourish.

This is the perfect time to delegate power to local authorities and encourage local governments to develop industries and promote production.

After Cheng Ziwen's incident, Su Ze became even more certain of this idea.

Relying solely on the central government is insufficient.

The Ministry of Works has been busy repairing rivers, but the Yangtze River, the Yellow River, and the Grand Canal are not yet finished, let alone the local rivers.

However, even Cheng Ziwen, the dignified Provincial Governor of Guangxi, who gathered all the financial resources of Guangxi, was unable to support the repair of the Yong River. What was the state of the area then?
No wonder, in history, those who left behind water conservancy projects that benefited the local people were all famous and capable ministers.

Gao Gong was also caught in a dilemma.

As the reforms deepened, Gao Gong's attitude shifted from unconditionally supporting Su Ze's memorial to weighing the pros and cons.

Unfortunately, the reforms have entered a critical phase, and the problems we face now are no longer simple judgment questions.

Every option has its advantages and disadvantages.

The only advantage is that Su Ze will lay out both the pros and cons on the table.

How to make a choice at this point is a test of a person's political wisdom.

To Gao Gong's surprise, Zhang Juzheng was the first to express his support.

Zhang Juzheng said:
“Zilin’s suggestion is reasonable. You should submit a memorial as soon as possible, and the Ministry of Revenue should make another calculation. We request Your Majesty’s decision.”

Gao Gong quickly realized what was happening.

Zhang Juzheng was calculating the accounts.

It was two provinces and one prefecture that levied commercial taxes, but the total amount of commercial taxes was not very large.

As mentioned before, the increase in tax revenue for the imperial court mainly came from the "magic of coin minting" and the maritime trade tax.

Commercial taxes weren't a major source of revenue anyway, so what's wrong with giving some to local officials?

It can also motivate them, so why not?
Gao Gong understood this point and agreed, saying:
"Then let's conclude today's discussion. As for the matter of tax sharing, we leave it to Your Majesty to decide."

The relationship between the central government and local authorities is a crucial matter that naturally requires the emperor to make decisions.
-
Su Ze's memorial was not submitted until July 1st.

The reason, of course, is that the quota for memorials in June has been used up!

A Memorial Requesting Tax Allocation to Alleviate Local Financial Difficulties

——[Simulation Start]——

The memorial entitled "Request for Tax Allocation to Alleviate Local Financial Difficulties" was sent to the Cabinet.

Although the cabinet strongly supported your memorial, the ailing Longqing Emperor was still unable to make a decision on the matter, which concerned local finances.

Finally, the Longqing Emperor kept your memorial.

——[Simulation End]——

[Remaining Prestige: 1080.]

[To approve your memorial, you need to pay 800 prestige points. Do you wish to pay?]

Su Ze sighed. Emperor Longqing had never been a decisive emperor, and now that he was seriously ill and mute, he was even more afraid of being bothered. It was to be expected that he would stay in the capital.

800 prestige points were a bit of a pain, but for such a major event as tax-sharing reform, if it could be accomplished with just 800 prestige points, it was already very worthwhile. Su Ze also knew that this was because currently only two provinces and one prefecture were levying commercial taxes, and the overall scale of commercial taxes was not large.

Even Zhang Juzheng probably didn't realize how enormous the commercial tax was in the original timeline, becoming an absolute pillar of the national treasury!
Even when the land and agricultural taxes were eventually abolished, it had absolutely no impact on the country's finances!
Su Ze decisively chose "yes".

[Prestige points have been deducted, leaving 280 prestige points. Please complete the memorial as soon as possible and await its effect.]
-
Liu Yingjie, the Right Provincial Governor of Henan, is currently in the guesthouse in the capital.

At the beginning of this year, Wang Shizhen, the Minister of the Court of State Ceremonies, believed that the guesthouse, which was a sinecure, was a waste of resources. He petitioned that officials traveling to the capital could stay at the guesthouse, with the Ministry of Personnel paying for their accommodation.

The two sides quickly reached an agreement, and the Ministry of Personnel also readily agreed.

The accommodation of high-ranking officials when they travel to Beijing to report on their work has always been a headache for the Ministry of Personnel.

Previously, these people lived in the guild hall, but the guild hall itself was a non-governmental organization and a place for political brokers, so the residents were a mixed bag.

However, the Ministry of Personnel was not capable of arranging accommodations for them.

The guesthouse was originally built to welcome envoys from all directions. It covers a large area, has excellent accommodations, and is famous for its delicious food.

For these officials who came to the capital to report on their duties, staying in the guesthouse was both formal and convenient. The Ministry of Personnel only had to pay some accommodation costs, which was really a great deal.

Liu Yingjie was the Right Provincial Administration Commissioner of Henan. This year, he was promoted to the Left Provincial Administration Commissioner of Henan. Although both positions are in Henan, it is still a promotion for a high-ranking official, from second-in-command to first-in-command. Liu Yingjie still has to go to Beijing to report on his work.

Not long after Liu Yingjie arrived in the capital, before he was even summoned by the emperor, he encountered the matter of Cheng Ziwen.

Liu Yingjie and Cheng Ziwen were both Jinshi graduates from the same cohort, and both served in local government positions, so they naturally became good friends.

Over the years, the two gradually came to power in their respective regions and frequently exchanged letters to discuss matters of officialdom. They were quite close friends.

When his friend was imprisoned, Liu Yingjie launched a rescue operation in the capital, but Cheng Ziwen was a wanted criminal, and Liu Yingjie never had the opportunity to visit him.

Only after Liu Yingjie pleaded his case in the main hall of the Ministry of Justice was he able to pull some strings and meet Cheng Ziwen in the imperial prison.

Liu Yingjie was surprised when he saw Cheng Ziwen.

To his surprise, Cheng Ziwen actually gained weight during his time in prison!
His complexion was even better than it was seven years ago when they parted in the capital!
"Brother Wenchang (Chengziwenzi), why do you look even better in prison?"

Cheng Ziwen said with a smile:

"Brother Zihe (Liu Yingjie's courtesy name), you don't need to worry about the affairs of Guangxi. You eat and drink well every day. How can you not get fat?"

Liu Yingjie gave a wry smile.

However, after his self-defense at the Ministry of Justice last time, Liu Yingjie knew that his friend should be fine.

The current emperor is lenient, and Cheng Ziwen is only acting for the people; at most, he will be dismissed from office and return to his hometown.

As Cheng Ziwen said, serving as the provincial governor in Guangxi was like walking on thin ice; returning home might allow him to live a few more years.

Cheng Ziwen said to Liu Yingjie, "I haven't congratulated Brother Zihe on his promotion yet."

Liu Yingjie smiled wryly again:

"The position of Provincial Governor of Henan is not exactly a desirable post, so why must you mock me, Brother Wenchang?"

Cheng Ziwen laughed and said:
"You don't have any Tusi (chieftains) in Henan."

Liu Yingjie said with a bitter face:

"Henan has no chieftains, but it has kings."

"Hahahaha!"

Cheng Ziwen was already in the mood to return home, and he laughed heartily.

Henan had three prefectures: the Zhou King's, the Yi King's, and the Hui King's. These three prefectures consumed nearly 500,000 shi of grain annually.

Most of these funds were paid by the imperial court, but the Three Princes' Palace also had a large amount of tax-exempt farmland. When Liu Yingjie served as the Right Provincial Governor, he organized people to conduct a land survey, and this farmland accounted for about 30% of the arable land in Henan.

Liu Yingjie sighed again, "Henan also has the problem of displaced people, which is much more troublesome than the Tusi rebellion."

Cheng Ziwen nodded after listening.

Nanyang Prefecture in Henan Province was the region with the highest concentration of displaced people in the Central Plains.

Migrants are people without land.

There are many reasons for the emergence of migrants, such as land consolidation, floods and droughts, and tax evasion and corvée evasion.

The Yellow River flows through Henan, and the area along its course is a flood-prone region. Henan is also the heart of the Central Plains, a region with well-developed transportation networks, and Nanyang Prefecture was a transit point for migrants from various provinces.

Because the capital was located north of Henan, Henan needed to block the northward migration of refugees. Once these refugees were blocked, they would move to Hubei, Henan, and Shaanxi.

In addition, the Jingxiang region of Huguang was also a major source of migrants. After migrating north, these migrants would enter Nanyang Prefecture and eventually settle in Henan.

Refugees and regional princes were two major obstacles weighing on the heads of local officials in Henan.

Liu Yingjie served as an official in Henan for a long time and had a deep understanding of the local conditions and people in Henan.

Cheng Ziwen looked at his friend from the same age and understood his struggles in the officialdom.

That's how it is in officialdom.

Those who lie down and do nothing suffer, and those who think about corruption are also fine. The ones who suffer the most are the officials who want to do something and benefit the people in their jurisdiction.

After thinking it over, Cheng Ziwen decided to give his friend some pointers.

He said:
"Brother Zihe, are you aware of the imperial court's proposal to reform the tax system?"

Liu Yingjie nodded.

Su Ze's memorial did not attract much attention from the public; only the Commercial Daily, which was most concerned about taxation, published it briefly.

But Liu Yingjie asked in confusion:

"Brother Wenchang, how did you know about this while you were in prison?"

Cheng Ziwen said:
“These days, people often come to visit me, so I ask them to bring me the latest newspapers.”

"Refugees and feudal lords are problems that cannot be solved for the time being. If Brother Wenchang wants to do something, he needs to have silver dollars on hand."

"Brother Zihe, you can start from here."

Liu Yingjie began to think.

In fact, he had also studied Su Ze's memorial on the reform of tax sharing.

If a commercial tax could be levied, keeping most of the industrial and commercial tax revenue locally, it would indeed make local officials pay more attention to the development of industry and commerce.

But how much tax revenue can Henan actually collect from industry and commerce?
Liu Yingjie actually lacked confidence.

Compared to the unknown industrial and commercial taxes, levying commercial taxes would require persuading the gentry and officials throughout the province, which was much more difficult.

Cheng Ziwen said:
"Brother Wenchang, it's difficult to persuade the whole of Henan, but you, as the provincial governor, should be able to get one or two prefectures to collect commercial taxes, right?"

Liu Yingjie nodded.

Liu Yingjie recalled the various prefectures of Henan, and he raised his head to ask:
"Brother Zihe, are you referring to Huaiqing Prefecture?!"

Cheng Ziwen nodded immediately, and Liu Yingjie bowed deeply, saying to Cheng Ziwen:
"Thank you for your guidance, Brother Wenchang!"

After saying this, Liu Yingjie immediately left the imperial prison.

On July 2, Liu Yingjie, the Henan Provincial Governor who was waiting to be summoned to the capital, received a notice from the Directorate of Ceremonial Affairs that his scheduled audience with the emperor before taking office had been changed to a question-and-answer session with a memorial.

Although Liu Yingjie was somewhat disappointed that he could not present his ideas to the emperor in person, he still quickly drafted a memorial.

On July 3, Liu Yingjie, the provincial governor of Henan, submitted a memorial to the court requesting a tax-sharing reform.

In his memorial to the throne, Liu Yingjie promised to levy commercial taxes in Huaiqing Prefecture, Henan Province, and made a military pledge to persuade the entire Henan province to levy commercial and industrial taxes within three years!

(End of this chapter)