Please explain the relationship between taxes, wealth, income and growth

[morteduzionism]

I noticed that when I raise my taxes my "income" goes up but I get an icon saying that "town wealth" (IIRC) is going down by x per cent...

I think something also happens with population growth...but I'm not 100% on that one...

I'm probably using the wrong terms but I hope everyone understands what I'm asking.


EDIT: I read Company Man's Guide to ETW economy and still don't understand. I even printed it out. I simply can't understand how higher taxes is bad for my bottom line (how much money I have per turn to spend on the military).

[British-Bulldog]

If you keep your taxes at the level they are at the start of the campaign and you'll soon be basking in wealth. When you raise it higher than the original levels you'll notice the town wealth and population going down shown by the red arrow. After a while you'll town wealth and population will start to go up because of the tax levels, I also find that patriotic fervour increases the growth and wealth of a town dramatically; just conquer alot of territories and keep the taxes low and you'll be rich in no time

[eXistenZ]

Lower class; these taxes affect your population growth= the rate new towns are formed. you will notice the same affect when you empty a region of tax. also from what i've heard, more lower class people don't affect the tax income of that class.

Upper clas/nobility: These affect townwealth= how much your region income grows per turn.
Keeping upper clas tax low or normal, will boost your economy, making the region wealthier in the course of time. Simple (hypothetical ) example: let's say you have a region which generates 3000 a turn ( with tax rate of 33.3% that makes 1000 a turn). The town wealth is let say 18 on normal taxes. Next turn the region will generate 3018 a turn, which gives you 1006 for your treasury. It does't seem much, but it can become very much in the course of the game, a long with some technologies you discover.

Now if you raise the upper class tax a lot, town wealth grow will be negative. Whic means the region will produce lets say 2950 next turn. Again, in the long run this can be very negative/devastive

But best advice: keep the taxes they way they are in the beginning. Only when you need quickly a lot of money (because your trade routes are blockaded or so), raise the taxes. or when you want a revolution...

[masterbaker]

Always try to keep upper class taxes fairly low, I normally try for level 2 out of 5 even when at war, except to raise emergency funds.

Lower class taxes should also be low at the beginning of the game, but you may want to raise them once the majority of provinces in a theatre suddenly have hardly any villages left to develop. Although, by late in the game the scum are normally getting a bit restless.

[morteduzionism]

I understand now...

Lower class; these taxes affect your population growth= the rate new towns are formed. you will notice the same affect when you empty a region of tax. also from what i've heard, more lower class people don't affect the tax income of that class.

"Taxes" on the lower class only affect population growth within the theatre.

This "growth" differs between the regions.

Population growth causes the growth of towns which...

Upper clas/nobility: These affect townwealth= how much your region income grows per turn.
Keeping upper clas tax low or normal, will boost your economy, making the region wealthier in the course of time. Simple (hypothetical ) example: let's say you have a region which generates 3000 a turn ( with tax rate of 33.3% that makes 1000 a turn). The town wealth is let say 18 on normal taxes. Next turn the region will generate 3018 a turn, which gives you 1006 for your treasury. It does't seem much, but it can become very much in the course of the game, a long with some technologies you discover.

...once developed can have industries which increases the wealth of the region.

The tax rate on the nobility is actually the percentage of region wealth that goes into the treasury each turn.

If there's no growth to the wealth within the towns of a region then region wealth remains static and would earn the same percentage each turn.

Having lower taxes, on the nobility, has a positive affect on the growth of wealth in the various towns in the specified theatre.

Having positive wealth growth in a theatre's towns increases the wealth of each region which is then taxed and added to the treasury.

Which is why higher taxes is bad for the bottom line...over the long run.

[Kobal2]

I understand now...


"Taxes" on the lower class only affect population growth within the theatre.

This "growth" differs between the regions.

Correct. Pop growth varies from province to province based on the fertility of the soil (a hidden "baseline" which varies from province to province), plus X% from farms, plus Y% from fishing ports, minus tax modifier, minus famines (which can be removed with farm tech)

Population growth causes the growth of towns which...


...once developed can have industries which increases the wealth of the region.

The tax rate on the nobility is actually the percentage of region wealth that goes into the treasury each turn.

Yes and no : both kinds of taxes give you a percentage of the theatre's total province wealth. This is why if both your taxe sliders are at the same level, you will get exactly the same amount of cash from each kind. However, only nobility taxes affect province wealth growth/shrinkage - once all the villages are grown, feel free to tax the proles within an inch of their lives .

If there's no growth to the wealth within the towns of a region then region wealth remains static and would earn the same percentage each turn.

Having lower taxes, on the nobility, has a positive affect on the growth of wealth in the various towns in the specified theatre.

Having positive wealth growth in a theatre's towns increases the wealth of each region which is then taxed and added to the treasury.

Which is why higher taxes is bad for the bottom line...over the long run.

Mostly correct, yes.
However wealth growth/decrease, like pop growth, is not a theatre but a province-to-province deal. While the nobility tax is a blanket malus that applies to every region in the theatre (except those provinces that are exempt from tax, obviously), and is the biggest factor in it, each individual province's growth is separate, and affected by quite a few other things as well. For example, not having at least basic roads will give a wealth growth penalty (as far as I can tell, paved/metalled roads don't change anything in that department, but you must have dirt roads. Even on islands !). Having enemy armies rampaging in the province also gives a penalty. Some techs, mostly industrial and enlightenment ones, also give a boost, etc...

It's all detailed on the province details window - hover your mouse over the different icons to get a description of what does what.

Finally, I believe (not sure about that, but it'd make sense) wealth growth also affects individual villages on the map as well : they all start out Very Poor, and over time become Poor, Growing, Wealthy, then Rich and finally Very Rich. Weavers and Metalworkers make even more money the richer the village they're in, and I believe wealth growth affects how fast villages go up that scale, but I'm not sure.

[MortenJessen]

I noticed that when I raise my taxes my "income" goes up but I get an icon saying that "town wealth" (IIRC) is going down by x per cent...

I think something also happens with population growth...but I'm not 100% on that one...

I'm probably using the wrong terms but I hope everyone understands what I'm asking.


EDIT: I read Company Man's Guide to ETW economy and still don't understand. I even printed it out. I simply can't understand how higher taxes is bad for my bottom line (how much money I have per turn to spend on the military).

Hi there.

Spoiler Alert, click show to read: 

I can not remember who made this, but is sure is usefull.
Y.S.
M. Jessen

[kikosemmek]

Double posted. I'm not sure how. My appologies.

[kikosemmek]

You collect taxes as a percentage of region wealth, which is shown when you mouse over the region capital. Your region wealth is basically how much your region is worth, and growth is the change of region wealth. Growth can be influenced by many things, including your ministers, your production buildings, and your taxes. Lower taxes promote higher growth to region wealth, and thus indirectly increase your profits in the long term, but directly decrease them in the short term.

Trade is a separate income from taxation. Though in the real world most of the profits off of trade are made through tariffs and taxation, as far as the government is concerned, in Empire, the government is big business itself, and therefore your trade income is directly from the exportation of goods, mainly from colonial possessions.

The price of each commodity is available on the top of your trade tab, and it can change. I may be mistaken, but I believe it changes in response to supply and demand- if there are lots of ships bringing in sugar, the price will decrease, and so every unit sold is worth less as a result, though on the whole you might be making more money based on your export tonnage. You export these goods to your trade partners, and you can see how much of each commodity your partners are buying in the trade tab. Multiply these by their respective prices, and you can see how much you make by exporting goods to that specific faction. This calculation is also shown, along with a final tally of all of your trade income. It is not influenced by taxation. Rather, it is determined by the amount of goods you are exporting, the kinds of goods (and therefore their respective prices) you are exporting, the number of your trade partners, and their demand for your goods. Typically, populous trade partners buy up more stuff than less populous factions. You will find, for example, that the Ottoman Empire will routinely make you more money through trade than Venice.

Trade is usually bottlenecked by shipping capacity- that is, your capital region has to receive all the goods you produce -before- shipping them out, and not having enough ports for that can hamstring your income. Thus, make sure you have more than enough properly upgraded ports with a continuous land route to your home region. Piracy and blockades are obvious factors.