Taxes in FRPG

We are going to do everything we can to make this thought provoking and not dull!  We cannot make it exciting, but let us give you a couple of ideas about taxes in FRPG and how to make them very easy on you as a GM and on the PCs.

 

They always say that nothing in life is certain except for death and taxes.  In FRPGs, death isn’t all that certain, and it certainly isn’t permanent.  So it’s just taxes then!  What taxes do we pay in the modern age?  Being a U.S. citizen, I know ours best, but I have a feeling that even our friends and supporters in Canada and the UK will see very close similarities.  Beyond that, I admit, I don’t know.

 

One last intro note - Governments also make money by selling currency and through fines.  We’re not getting into those right now.

 

In the USA, we pay federal income tax, state income tax (most do), FICA/social security (retirement), unemployment, and medicare - all of which are withheld from our pay checks.  OK, the employer pays half the social security and the unemployment, but it is still tied to your pay check.  Anyone who owns real estate pays property taxes, and in some states, you pay it on far more than just real estate.  You pay sales tax:  state, county, city and then all those cute little ones they tack on like taxes on cigarettes, alcohol, and gasoline.  Don’t forget the “sales taxes” that they force on hotels because it is always better to tax the people who don’t vote for you.

 

That’s a lot!  But there’s more!  We haven’t included some of the tougher to see taxes, things like the fee on your license plate, in many areas the fees for garbage, water, and sewers, and what about the death taxes?  You might want to argue if those are all taxes, but they are money paid into a governmental agency.  You pay for your water, but your taxes pay for the police?  Yeah - we’re counting both as taxes.

But that isn’t even close to everything!  What about tariffs?  Whatever your opinion of tariffs in general and the latest round of tariff disagreements, tariffs have been around forever!  You have every right to have an opinion about the latest news, but people need to stop pretending that arguments about tariffs is something new.  But you don’t directly pay tariffs, right?  Correct - You pay them indirectly!  Every tax paid by someone who supplies you with a good or service is a tax you eventually pay.

OK - That was the dull part.  What do you do as a GM?  Do you mimic this labyrinth of taxes and fees?  Probably not!  In the same vein that no one understands the current federal taxation code, you don’t want to create for yourself a bureaucratic nightmare.  Even more importantly, you don’t want to try and explain this to the players and then start computing sales tax every time they go to buy a sword or a healing potion.

So what can you do?  First off, if you have feudal lords with peasants, they don’t pay taxes.  Instead they work them off.  At least in some points in time in some regions, a peasant worked about 60 days a year on his lord’s lands.  Because that peasant has 365 days in the year to work, that’s roughly a 16% tax on that person’s work.  Notice, we didn’t try to factor in religious holidays, but instead went with 365.  Establishing the population or universe of what can be taxed becomes pretty important.  Even if religious requirements prevent the same peasant from working 52-104 days a year, the peasant is “choosing” not to work those days, and the government probably doesn’t care.

OK, but this 16% number is a good one to start with!  Just as in Grain Into Gold, we started with the cost of a pound of grain and therefore the cost of a one pound loaf of bread, the farmers are the base unit that most governments will begin with.  History typically shows that in normal times, tax rates are considered to be between 15-25%.  But let’s stick to 15-16% as the “base”.

Once in a fantasy city, the government has a difficult time tracking the things that we take for granted nowadays.  Sales taxes don’t really work in a fantasy environment, because their accounting practices are not that precise.  Plus, how does a grocer figure the sales tax when he is bartering for some of his stock?  This can be similar for income taxes, as few employers keep great records of how much they paid each employee during the year.  They just pay them at the end of the night or week and send them home.

 

So the government wants to tax the regular folks at about 16% of their pay.  There can be a poll tax - a tax on every adult or every worker.  These are flat taxes and as such they impact the poor far more than the rich.  Ignoring the “fairness” of such a thing, few governments are willing to tax a wealthy earner at <1% of their income, just because the poll tax needs to be fair.

 

What we think works best for FRPGs is to have the governments set property taxes that can cover the lion’s share of the taxes they need to collect.  If they can collect 15-16% of a person’s pay by taxing the home they live in, then then can still collect more money from things like tariffs on foreigners, fines, and coinage.

So - for all of you who stuck with us this far - thank you!  Here is the easy thing to do:  Multiply the average monthly wage by 15%.  This is now the property tax on a single family home.  Assume that the government has people whose jobs are to make that (as a base) work for the entire city - meaning they adjust for apartment buildings, slums and mansions.  Also assume that they charge a 15% tariff on all manufactured goods.  By manufactured, we are attempting to exclude things raw materials, mainly farm goods.

 

And that should be it.  If your PCs own their home, they need to pay property taxes.  If they rent, the property taxes will be added into their rent payments.  If they buy something from a store or market, the tariffs and a share of the property taxes will be factored into the price already.

 

To us, this is the starting point, but for many this might be the end point.  If you want the details on what this actually means for your fantasy city, join our Patreon project typically known as Small Bites (How to Create Your Fantasy World in Small Bites).  We’re getting deep into the workings of city guards and other policing units, and to do that, you have to understand the taxing of your cities.