I Became A Black Merchant In Another World-Chapter 223: Consumption Tax and Accountants (2)

“Indeed, I agree with the Baron’s suggestion that a new profession should be created to prevent those who commit fraud with stocks.”

“Thank you, Your Majesty.”

“However, do you really think it’s necessary to create a university to train them?”

In the Tuscany Empire, or rather, anywhere on the Albanian continent, a university degree is treated like a passed civil service exam.

Of course, the level of study required at medieval universities is not comparable to passing any exam.

The graduation rate is only around 10% of all enrollees.

Even commoners who graduate from university are often recognized with a rise in social status.

If accountants are included in that category, it will increase the ladder of upward mobility for citizens.

‘From the Emperor’s perspective, he must be worried about the class system.’

“As long as the stock system continues, the scale of money moving through stocks will only grow, much larger than it is now.”

One of the major factors supporting the Age of Discovery and the Industrial Revolution was the stock system.

Some scholars argue that even when considering the entire GDP of Europe before the 18th century, the West could never match the Qing Dynasty, yet the Westerners managed to dominate East Asia because they could distribute risk through stocks, which allowed them to make more daring investments. This contributed to the economic and industrial development, showing the huge impact the system had on society.

There’s no doubt that the scale of capital circulating through stocks will only increase.

“Right now, it's only tens of thousands of gold coins moving around, but later, the amount will reach the equivalent of several years' worth of taxes in the Tuscany Empire.”

As this money moves around, wealth will be redistributed, creating a trickle-down effect.

Although the trickle-down effect has been proven ineffective in the 21st century both academically and in the capital markets, in medieval countries like Tuscany Empire, money tends to accumulate in the pockets of the powerful.

But if this money is invested in various businesses, leading to increased employment, wage growth, and a larger economy, it will be a great help to the economy’s development and the well-being of the common people.

Of course, due to the nature of the trickle-down effect, the rich will ultimately fill their pockets more, and the portion of money distributed to the commoners might decrease.

In large corporations, even though the employee’s wage-to-revenue ratio is higher than in small businesses, it’s not because they pay more, but simply because the company itself has more money. Even if they spend the same amount or less, the employees’ salaries will increase as a result.

‘For now, the benefits of the trickle-down effect far outweigh its negative side effects.’

“Create a department under the Commercial Law Department to manage stocks, issue stock trading licenses across the country, and dispatch accountants to audit the books. Through that, you will be able to make huge profits.”

Until the 1980s and 1990s, it was common for civil servants to accept bribes from citizens.

Especially during the redevelopment period in Seoul, it’s said that if someone held a position like the construction director of a specific district, they could scrape together enough money to buy several apartments in Gangnam by simply preparing for a few years of prison.

Bribery was practically legal and necessary in Tuscany Empire, so it goes without saying.

“If you establish such a system to catch those who try to defraud others through stocks, you will gain the admiration of merchants, citizens, and even the nobility. After all, they wouldn’t want to be defrauded after investing in stocks either.”

Usually, when you tell the Emperor that people will praise him for doing something, it’s 99% just flattery, but what I said this time is genuinely true.

Among the nobility, some must be lamenting the loss of their hard-earned money due to stock fraud.

If the Emperor can lower the chance of fraud with the verification of accountants, it’s like he’s protecting my money.

‘There’s no one who wouldn’t cheer for the Emperor in that case.’

“You can earn huge profits and be praised at the same time.”

“And if you secure enough accountants, you might one day be able to tax all goods in the Empire.”

One of the public revenues that supported the foundation of the Industrial Revolution was the consumption tax policy.

This tax, which we are more familiar with as VAT, contributes an enormous amount to the budget, accounting for about 31% of taxes collected by OECD countries, and is relatively low in terms of resistance.

If a consumption tax is introduced in Tuscany Empire, where there is only land taxes and occasional tolls collected from merchants, the treasury will be overflowing, and accountants responsible for managing the finances will rejoice in the huge windfall.

The Emperor would try to build absolute monarchial power based on the revenue from the consumption tax.

In exchange for paying the consumption tax, merchants and I will gain the right to operate without interference from the powers that be, as long as we do not engage in illegal activities.

‘Paying a consumption tax and then earning more money elsewhere benefits me more.’

Other merchants might complain, saying that Baron Rothschild is crushing our small businesses, but do I really need to listen to them?

I’ve made it safe for them.

“Think about it.”

I slowly and clearly explained.

“Every time a beer is sold at a shabby inn in Tuscany Empire, or a loaf of bread, a hammer in the market, or a chicken, a percentage of the sale price—let’s say 1%, no, 5%—will be added to the royal treasury. Imagine the beautiful scene that will unfold.”

Visit freёnovelkiss.com for the 𝑏est n𝘰vel reading experience.

In medieval states, excluding serfs, all other classes pay significantly lower taxes than in modern nations.

The nobles hold most of the wealth, but they enjoy de facto tax exemptions, except for shield taxes (military upkeep costs).

‘Paying shield taxes probably doesn’t even reach half of what high-income earners pay in income taxes.’

Beneath them, artisans and merchants only pay around 5%-10% of their earnings in taxes.

Due to this, medieval and early modern states were always short on funds, and after a few months of war, they’d spend the budget for an entire year or two.

Eventually, they would have to borrow money from tycoons or other merchants.

“Nobles claim that the number of people in their domains and the harvests of grains are the basis of power, but I believe the real basis of power is money.”

A Roman general once said:

‘The way to win a war is simple: money, money, and more money.’

And when bribing the nobility, money works wonders.

If bribing the nobles doesn’t work, just throw huge sums of money at their vassals or soldiers, and that could win you a war.

“If you can collect huge amounts through income taxes, all the nobles will have to bow before you. Because...”

A wicked smile spread across the Emperor’s face.

“As I’ve lived as Emperor, I’ve often had to make requests from the nobles. When I think about why I had to make those requests, I realize that it was because I didn’t have enough money. Of the 10 times I asked for help, 7 or 8 were about money.”

A friend of mine who majored in economics once told me:

“In households with husbands who earn more than 10 million won a month, the divorce rate is less than 5%. The lower the income, the higher the divorce rate,” he said.

Even if they married out of love, he explained, they ultimately laughed or cried because of money.

If that’s the case for a marriage with mutual interests, what about in matters of power?

It’s obvious even without saying a word.

‘There are many people who would sell their own fathers for money.’

“But if huge wealth is generated through consumption taxes, I could use money to bind the nobility. I would stand firmly at the center of the Empire.”

The Emperor looked as if he might burst with excitement, his face practically glowing with joy.

I wondered if he was a bit perverted, but I decided not to think badly of it.

After all, it benefits me, so it’s fine.

‘I just need to eat well and live well.’

“The permission for the university will be granted directly by me. Also, I will send a few accountants to the Commercial Law Department. We must show that accountants are helpful so that the department and other institutions will start placing them everywhere.”

I had lured the Emperor with consumption taxes, and now, unintentionally, he’s given me parachute placement rights.

Our Tuscany Empire is truly practical, unlike those Joseon idiots who, even when selecting talent, just use old exams to create 'Confucian addicts.'

If we have useful talent, the higher-ups directly recommend them, which is much better.

“Thank you, Your Majesty.”

“For now, they’ll start in roles assisting the administrators, but if they prove their worth, they can rise higher.”

I’ll need to pick out some of our top workers and bring them up to higher positions.

Then, I'll legally send gifts and occasionally ask them to do small favors for me.

“Do your best in establishing the university.”