Chapter Thirty-Nine: The Honor of Paying Taxes

As soon as he mentioned the need to raise officials’ salaries, the ministers who had just harbored some petty resentment immediately felt ashamed of their own thoughts. Among the officials, there were those like Li Sancai who were extremely wealthy, but most did not enjoy such good conditions at home. Even among the Donglin Party—figures like Yang Lian, Zuo Guangdou, Zhao Nanxing, Gong Nai, and Huang Zunsu—were merely of modest means. Once more, everyone knelt together, proclaiming in unison, “None are as wise as Your Majesty.” Some capital officials, impoverished due to their integrity, were so moved that their eyes glistened with tears.

Zhu Youxiao continued, “As for the specific regulations for collecting commercial taxes, Minister Xu shall take charge, with representatives from the Ministries of Personnel, Rites, Justice, and Works joining the discussions. Once you have reached a conclusion, submit a memorial for my review. Concerning the increase in officials’ salaries, let the Grand Secretary take the lead, with assistance from the six ministries, to devise a plan and report back to me.”

Xu Guangqi and Fang Congzhe stepped forward to accept the decree. After the court was dismissed, the ministers filed out, already animatedly discussing the two issues raised that day, making for a lively scene.

Soon, Xu Guangqi submitted a memorial detailing the method of tax collection. Zhu Youxiao examined it carefully: the preliminary tax rate was set at five percent. Stationary merchants would pay twice annually, while itinerant merchants would pay per transaction. Upon paying the tax, receipts would be issued; for itinerant merchants, these tax receipts would be valid throughout the country, and the same consignment could not be taxed again.

The Ministry of Revenue would establish a tax office in every county, a tax bureau in every prefecture, a tax agency in every circuit, and a tax authority in every province, while the Ministry itself would set up a central tax administration. Xu Guangqi recommended Bi Ziyan as the director. Zhu Youxiao accordingly decreed that Bi Ziyan, currently the Right Vice Censor-in-Chief and concurrently Governor of Tianjin, be promoted to Left Vice Minister of Revenue and Director of the Central Tax Administration. The tax system would be managed directly, independent from local authorities, and empowered to mobilize local military forces to deal with merchants evading taxes maliciously.

In that week’s issue of the Ming Gazette, the political commentary section featured an article by the pseudonymous Mr. Xiao Qi, titled “Why Commercial Taxes Should Be Levied.” Written entirely in plain language, it began by discussing the responsibilities of the state, arguing that the state ought to guarantee the rights of every subject. How is this to be achieved? Through armies, government offices, schools, almshouses, charitable pharmacies, and paupers’ cemeteries—all institutions that can only function properly with financial support. And where does that money come from? Only from taxes—“taking from the people to benefit the people.”

Currently, the court’s tax revenues derive chiefly from agricultural levies; to contend with the Jurchen threat, an additional Liao levy had been imposed. Most farming families were already impoverished and could scarcely bear more burdens, while commercial taxes had scarcely been collected at all. As a result, many great merchants had grown richer than the state itself—one former Grand Director of River Transport, for instance, had amassed a fortune greater than the annual government revenue. Such circumstances were the direct consequence of the lack of commercial taxation: what should have been the state's money—everyone's money—instead accumulated in the hands of a few, funding their debauchery while the nation and its people were left destitute.

The article then advocated for taxes in accordance with the natural order: to take from the surplus in order to supply what is lacking. Therefore, commercial taxes should not only be collected, but at a high rate, and tax evaders should be severely punished. The writer urged the emperor to thoroughly investigate the assets of the officials, for it was impossible that those with vast fortunes had acquired them all honestly; any found to have violated the law should be beheaded, their property confiscated, and their families exterminated.

Finally, he argued that merchants enjoyed the benefits of trading in a peaceful environment, free from bandits and extortion, only because of the good governance of the court. Should the government run out of funds and fail in its duties, chaos would follow, and it would be the merchants who suffered most in the end. Merchants should realize that paying taxes is a way to protect themselves and serves their own interests.

The article concluded with a slogan: “Paying taxes is honorable, tax evasion is shameful, and resisting tax should be punishable by death.”

Naturally, an editorial note followed: this article represents the author’s personal views. The imperial grace is vast; no punitive heavy taxation will be imposed, and a rate of five percent will be decreed. However, all merchants are urged to share the court’s concerns and contribute to the fiscal health of the Ming, for the government will not forget the support of loyal and righteous merchants.

This fierce article, coupled with the conciliatory editorial note, sparked a flood of letters from readers. Wang Cheng’en reported that most supported Mr. Xiao Qi’s arguments. Some wrote that no matter how much money Han families in Liaodong had, it was useless once their homes were destroyed by the Jurchens—had the court possessed sufficient funds to raise armies, Liaodong would have been pacified long ago. Others advocated for boycotting business with tax evaders and actively reporting them; still others cautioned against corruption in the tax collection process and urged the court to strengthen oversight.

Zhu Youxiao nodded repeatedly as he listened. Readers of the Gazette were generally those of means; since the majority supported commercial taxation, it showed that most merchants did not actually oppose it, understanding the rationale and recognizing that their ability to do business safely depended on the court serving as their shield. The real problem lay with merchants who had powerful backers; these individuals had already been paying taxes—often at a higher rate—but their payments went to the various levels of local magnates rather than the state. Now that the court intended to levy commercial taxes directly, their resistance was inevitable. Yet whether they were willing or not, Zhu Youxiao was determined to enforce this policy, even if it led to situations as drastic as those described in “The Epitaph of Five Martyrs.” The commercial tax must be collected.

He ordered Wang Cheng’en to polish the best of these letters and publish them in the readers’ correspondence column, with an editorial note expressing the emperor’s gratitude for the people’s support and promising that the Ministry of Revenue would establish proper tax collection and oversight procedures.

How to prevent graft in the tax bureaus was indeed a major issue. Zhu Youxiao first summoned Wei Zhongxian, instructing him to station personnel from the Eastern Depot in all levels of the tax departments, with exclusive oversight authority.

Wei Zhongxian, naturally, would obey the emperor in all things. Thumping his chest, he swore to Zhu Youxiao, “If any tax official dares to be corrupt, I will make him regret ever entering this world.”

Zhu Youxiao nodded in satisfaction, praising, “With you in charge, I am at ease.” This moved Wei Zhongxian so deeply that he was brought to tears and, after kowtowing repeatedly, withdrew with high spirits.

Still savoring that memorable phrase, Zhu Youxiao, after Wei Zhongxian had left, suddenly recalled that in history, the “you” in that saying ultimately failed to give “me” peace of mind. What if the Eastern Depot and the tax authorities colluded with each other?

He realized he could not entrust everything to Wei Zhongxian; that might not only fail to accomplish the task, but could also bring disaster upon him. He needed to establish another supervisory body. Remembering something he had overheard in a restaurant earlier, he summoned Zhang Cheng.