I agree that the model has its limitations. The original proposals were wildly more complicated ("I was young and inexperienced..."), but we toned them down so that they're simple and straightforward.
There are a lot of things we could have done but didn't (either they were too complicated for the player, or they were too complicated to implement - ie. too expensive). We consciously avoided making a mindbogglingly confusing behemoth of a strategy map like Europa Universalis III. Total War is a triple-A mass market game (currently the only PC game in the UK top 40 charts by the way) and that's why we aimed to make a game that gives interesting strategic options without being complicated.
The fact that you had to write this very insightful guide into the economics for people to finally understand how it works probably means that the economics game is still far too complicated. Ideally a game shouldn't require a lengthy guide to explain the economics.
I'm still not sure whether the bottom-up tax model is appropriate to an essentially pre-capitalist society. I still think the decision to reduce growth with lower class taxes is sound... for the 18th century. I might be wrong though... there are a quite few stools in classrooms with my name on them, too.