An extra note on taxation levels: even though the general rule is to keep taxes to low level to encourage population growth, this is not a must, and a good turtler should learn when and where rasing taxes is the correct choice; let's have a look on my idea.
Some settlements do not really need to grow up population: Minas Tirith, Moria, Erebor just to mention the most known, start as full developed settlements, so there is no real need to grow up the population as you are not going to upgrade them; for such settlements having normal tax as a standard should be the rule in the beginning, raised to high and then to very high as soon as you can do it without badly effecting public order. At the same time there are also other settlements which are almost completely developed (first level of stone walls), for those too it won't be very useful to set tax to low, I like to keep them to normal as a standard, because at this stage the city already has many buildings to be built and by the time you have built them all the city should be very close to the quantity of pupulation needed for the last level of development.
Villages: villages should always have low taxes and if you have him, you should also send there a general with 7 or more Respect (grants 0,5% pop growth), because villages are pretty useless both from the economic and the military point of view (and they can't even garrison a single unit for free!).
Towns: growth should be encouraged here, but you should also keep in mind where they are located compared to your borders, because, in particular for those towns which already have walls but start with a population of 500, it might take a while before they'll be developed to Large Towns and by this time your front will probably be very far from there; in this case I prefer to have normal or even high taxes on them, as their military impact will be null and the immediate increase in income can be really useful to develop cities and castles that will be your main recruitment centers.
Large Towns: same as above, much depends on the position of the same.
Final notice: never forget that before of anything you have to develop your income, so growing it is important of course, but if you don't have money to build that fairground on Minas Tirith or that Warehouse on Esgaroth, well having a bigger population means little, so when you need money to invest them in economic buildings, RAISE the taxes if this is the only solution.