Chapter 233: The Art of Tax Collection

For the next few minutes, he launched into a tirade against Chen Minggang—strictly speaking, it wasn’t slander, just the truth. It was clear that the Household Office clerk and the master advisor had not been getting along for years.

Wang Zhaomin didn’t know his words were being recorded—of course, he had no concept of it—but the Political Security Directorate was extremely interested in these materials of natives denouncing each other. Sometimes, a few words or a single sentence could reveal a great deal of useful information.

After listening carefully for a while, Wu De spoke in a troubled tone, “What Master Wang says is not without reason. It’s just that we are unfamiliar with the lay of the land in Lingao. Without the help of such people, I’m afraid we won’t be able to survive…”

Wang Zhaomin thought to himself, If it weren’t for all these “traitors” working and fighting for you, you certainly wouldn’t be able to survive. But he could only say this in his head. These ‘Kunzei’ are truly cunning, he thought. The meaning behind his words is clearly that he wants me to make the first offer.

Wang Zhaomin laid out the terms he had discussed with Wu Mingjin: when the autumn tax collection began, the transmigrators, under the name of Bairen Village, would voluntarily pay taxes to the county yamen. The taxable area would be five hundred mu of paddy fields. Regardless of the land’s fertility, each mu would be taxed at a rate of three and a half dou of unpolished rice, with a Liao Sarvice tax of 0.009 taels. The poll tax would be three hundred cash per person, levied on the roughly fifty people registered in Bairen Village.

In return, Wang Zhaomin promised that for every shi of the standard grain tax, an additional one dou, two and a half sheng of “wastage rice” would be levied. This income would be given entirely to the transmigrator group. This would amount to about one thousand shi of grain. As for the “reasonable burden” the transmigrators collected themselves, the county yamen would not interfere; they could collect it however they wished—in reality, they couldn’t interfere even if they wanted to.

Wu De calculated that under these terms, after deducting their own tax payments, their actual income would be around seven to eight hundred shi of rice. This was pure income obtained with virtually no effort.

However, this did not align with their objectives. The transmigrators were not in dire need of this small amount of rice. Not counting their warehouses in Lingao, they still had seven to eight thousand shi of unpolished rice in their granaries in Vietnam waiting to be shipped. Buying a few thousand more shi would be a trivial matter.

The transmigrator group intended to use this as an opportunity to break the centuries-old, chaotic, and corrupt tax system of the Ming dynasty and establish an efficient and orderly tax system. This would allow them to infiltrate and control Lingao’s county administration. In other words, they planned to use Lingao as a testing ground for their new administrative system. For this purpose, the transmigrators were prepared to pay a high price. A mere thousand shi of rice was not enough to sway them.

Wu De didn’t answer, instead asking, “Master Wang, we are completely ignorant of the ins and outs of this autumn tax collection. Could you perhaps explain it to us?”

Wang Zhaomin replied, “That’s not difficult. But the tricks and corrupt practices involved… it would take three days and three nights to tell it all.”

“Please enlighten us!”

Since they had nothing better to do, and seeing that this Chief Wu didn’t seem to be pushing him away, it seemed there was still room for discussion. To gain the Australians’ trust, Wang Zhaomin selected some of the corrupt practices and tricks of the grain tax collection and explained them to Wu De.

“Actually, my original training was in criminal law,” Wang Zhaomin said. “But I’ve also studied finance and grain. I can handle the finances of a small county.”

Whenever a county magistrate took office, the criminal law advisor and the finance and grain advisor were the most important. The former assisted the magistrate in handling criminal cases. The latter specialized in helping the “master” (the magistrate) with matters such as financial reports, land and population registers, household registration records, land measurement, opening granaries for disaster relief, and collecting miscellaneous taxes. Their expertise was not only in knowing the various tricks of the trade but also in being skilled at accounting.

Wang Zhaomin’s main field was criminal law, but his skills were not top-notch, so he had never been able to find a good “master”—most were just provincial graduates or “associate scholars” serving in remote, small counties. Small counties had small populations and few lawsuits, so hiring two separate advisors was a bit of a waste. Therefore, he had also learned about finance and grain. Although he wasn’t an expert, by holding two positions, he not only earned more himself but also saved his master the expense of one person, a win-win situation.

The skill of a finance and grain advisor lay not only in the abacus but also in understanding the situation and being able to handle the clerks. This was because for the standard land and poll tax, the Ministry of Revenue only cared about the total amount, not the details. Who owned how much land, where it was located, and how much tax was due—only the clerks in the county yamen’s Household Office knew this clearly. Their power rested on a secret register passed down through generations, known as the “Fish-Scale Register.” Without this register, no matter how capable one was, it was impossible to collect the taxes.

The Fish-Scale Register was originally a public document, drawn up and revised under government supervision. But over the years, the copies stored in the county had been lost or destroyed. The “public register” revised by the government had instead become the private property of the clerks. Whether it was the county magistrate or the finance advisor, to smoothly carry out the summer and autumn tax collections each year, they were often constrained by the clerks.

Generally, after a magistrate took office, the finance advisor would negotiate terms with the Household Office clerk, reaching a tacit understanding and colluding for mutual benefit. However, there had always been some friction between Wang Zhaomin and Chen Minggang. The reason was that Lingao was a remote place, far from the emperor’s reach, and the clerks had much less fear of the officials.

Because the Household Office clerk had the Fish-Scale Register, he could not only ensure the smooth running of official business but also use it to amass a great fortune. For many years, the collection of land and poll taxes had been a complete mess. Those who paid taxes might not receive an official receipt (a “grain string”), while those who didn’t pay might hold proof of payment. Some people who owned no land had to pay taxes, while others with thousands of acres paid nothing. As long as the “superiors” received the required quota, they didn’t care how the names were mixed up.

As for the various tricks, they were numerous. Wang Zhaomin mentioned “fraudulent entrustment” and “land gone, tax remains.” Wu De knew about the latter from Zhang Xingjiao’s case, and he had some knowledge of the former as well.

“Regarding the court’s tax exemptions, aren’t there fixed quotas?” Wu De “sold” a bit of the knowledge he had acquired, lest Wang Zhaomin think them completely ignorant and spout nonsense.

Wang Zhaomin was indeed taken aback. He thought this must have come from Chen Minggang and explained, “The court’s exemptions do have fixed quotas.” These quotas were set during the Hongwu era. Generally, a first-rank official in the capital could be exempt from 30 shi of tax, a second-rank official 24 shi, and so on. The exemptions for officials outside the capital were half that. As for imperial students, provincial graduates, and county scholars, they were typically exempt from 2 shi. Besides the exemption quota, all other self-owned land had to be reported to the government for taxation.

“And in reality? An exemption of two shi becomes dozens. When Prime Minister Zhang was in power and conducted the land survey, he first investigated his own family’s land. The official exemption was over eighty shi, but in reality, they were exempt from nearly nine hundred.”

Wu De listened carefully. He guessed “Prime Minister Zhang” referred to Zhang Juzheng. Yu E’shui had specifically mentioned Zhang Juzheng’s land survey during his lecture on the Ming dynasty’s tax system—it hadn’t been that long ago.

“Besides the court’s exemptions,” Wang Zhaomin said with a bitter smile, “there’s another group of people who also have so-called ‘fraudulent entrustments’.” In every county, there was a group of “special characters” who were vicious, domineering, and difficult to deal with—powerful landlords or village ruffians. They had to be appeased. Even if their grain was underweight or of poor quality, it had to be accepted. Sometimes, they were even given fake “grain strings”—proof of payment—in exchange for peace. Many small commoner households, in order to pay less tax, would “offer” their land to them. This was one type.

The second was when people would ask them to “handle the payment.” Over time, this formed what was known as “tax-farming households.” These households either had connections with officials as “tax enforcers” or were powerful local figures who could intimidate officials. If small households entrusted them with their tax payments, they would certainly have to pay an extra “surcharge,” but it was still cheaper than paying the tax themselves.

“The Gou brothers you took down were originally the two biggest tax-farmers in the county,” Wang Zhaomin said. “But if they hadn’t colluded with Chen Minggang and acted as ‘tax enforcers,’ they couldn’t have become tax-farmers.”

Wu De nodded. This “tax-farmer” sounded a bit like a “tax collector” from other contexts.

“Tax-farmers” naturally didn’t work for free. They would skim off the top. The more audacious ones would simply collect the grain and not hand it over, dragging out the payment until the court eventually granted an “amnesty.” This practice was rampant in the Jiangnan region during the late Ming and early Qing.

When some paid less, others had to pay more. The county’s tax burden still fell on the heads of its people. On top of that were various forms of exploitation and waste, plus the benefits for the county officials, all of which fell on the common people. This was called “wastage grain and surplus levy,” also known as “surcharges.”

“Surcharges” were not considered “illegal fees”; they were explicitly stipulated in the Ming tax system. In some places, the additional wastage and surplus rice per shi could be as high as 7.6 dou, more than half the standard tax. This extra income was the largest and most reliable source of “grey income” for local officials. It was much safer than the black money obtained through corruption and bribery.

The “surcharges” were nominally for the transportation costs and losses of the tax grain, but in reality, there were no standards, and they were highly arbitrary. Wang Zhaomin’s daring proposal to levy an additional 1.2 dou per shi for the transmigrators was precisely exploiting this loophole.

Wang Zhaomin was vague about the “surcharges,” only saying they were to cover transportation costs and losses. He certainly didn’t want the Australians to know too much about this source of income.

Wu De thought to himself: No wonder Luo Duo said that Lingao county’s real tax burden was over fifteen thousand shi. From the sound of it, that’s entirely possible.

“What is the customary wastage rice per shi in this county?”

Wang Zhaomin was startled and quickly said, “For you esteemed gentlemen, you only need to pay the standard amount. All surcharges will be waived.”

Wu De thought, It doesn’t matter if you don’t tell me. We’ll find out on our own.

“The Liao Sarvice tax must be quite a challenge for the county, right?” Wu De asked.

“It is,” Wang Zhaomin said, nodding involuntarily, as this was a major source of his worries.

“What’s the difficulty?!” Wu De pressed, not letting the issue go.

Wang Zhaomin hesitated for a moment, then said, “Silver is expensive.”