Chapter 1074: The Kaibao New Policy

On the fifteenth day of the third month in the first year of Kaibao, the Emperor held a grand court assembly with only one item on the agenda: promulgating the new policy decrees. This "new governance strategy," which had been brewing for nearly half a year on Emperor Liu's side, deliberated in the halls of the Eastern Capital for over a month, and stirred reactions and upheavals among the people, finally came forth amid a chorus of eager anticipation.

Though called a new policy, it was not a reform of the legal system—it was merely a governance strategy better suited to the nation's conditions and the people's circumstances, adopted in response to the Great Han's new situation as the state developed into a new stage. Moreover, although the Emperor's will dominated, on the surface it was the result of officials offering their views freely, synthesizing opinions, and deliberating together. The bureaucracy's participation was high, even if most of their suggestions were not adopted.

The core philosophy of the so-called "Kaibao New Policy" was but one point: sheathe the sword and cultivate culture, let the people rest and recover. Every decree pointed toward a single goal—benefiting the people.

On the matter of lightening the people's burdens, there was consensus both inside and outside the court. After all, there was no pressure of unifying the realm by destroying other states, and the military threat had been greatly reduced after severely wounding Liao years earlier. Under such circumstances, the Great Han had ample room to make adjustments and relieve pressure on the common folk.

As for concrete implementation, it was of course not as simple as a single phrase about reducing corvée labor and lowering taxes. After repeated deliberations among the officials, combined with careful consideration by Liu Chengyou and his chief ministers, the following measures were decided upon.

First, the most direct one: the poll tax per adult male was reduced from the original one hundred cash per year to forty cash, and the age of adulthood was raised from twenty to twenty-one.

Neither the previous rent-adjustment-and-corvée system nor the Two-Tax Law that the Great Han inherited originally had any provision for a poll tax. It was only because the southern states all had similar levies—collecting in cash, grain, or silk cloth—that at the founding of the state, to alleviate fiscal difficulties, State Finance Commissioner Wang Zhang, that "bloodsucker," also devised a "poll tax law."

The original regulation required each adult male to pay two hundred cash per year, with adulthood set at sixteen. With such oppressive governance, how could the early Great Han court win the people's hearts? How could Wang Zhang avoid being cursed? Moreover, a large portion of the poll tax revenue at that time never entered the national treasury but fell into the pockets of regional military governors, becoming a legitimate means for them to amass wealth—after all, they could always shift the blame onto the court.

Back then there was no other choice—without inventing pretexts to raise money, the court could barely sustain itself. Even after Emperor Liu took control of military and political affairs and began the Qianyou reforms, only the most absurd miscellaneous taxes were abolished; the poll tax was left untouched.

It was not until later—after conquering the Meng Shu, pacifying Hezhong, and with the Great Han's situation stabilizing, when the state began cultivating its internal strength in preparation for taking Huainan—that Emperor Liu finally made the poll tax "more reasonable," reducing it to one hundred fifty cash per adult male per year and raising the age of adulthood to eighteen.

Though still heavy, it was at least progress, and for the common folk, it was a form of burden reduction and pressure relief. Later, as the court's situation improved day by day—taking Huainan, recovering Qinfeng, and securing Jinghu—Liu Chengyou once again benefited the people. After returning from his imperial tour in the ninth year of Qianyou, he lowered the poll tax to one hundred cash and raised the age to twenty, where it remained until now. By this point, the people of the Great Han were already praising the Emperor's benevolence.

Now, reducing the poll tax further would absolutely delight the populace and earn high praise for the sage sovereign. Yet the newly grown common folk might not realize that originally, they had never needed to pay this poll tax at all.

And this single measure alone, according to the calculations of the Ministry of Revenue and the Budget Bureau, would cost the court over a million strings of cash annually in lost poll tax revenue. This decree was most favorable to the people of Jiang, Zhe, and Min. Take Wuyue as an example: their people paid three hundred fifty cash per adult male per year, and now it was suddenly slashed to forty cash—how could their goodwill and recognition toward the Great Han court not surge?

Second, adjustments were made to the annual Two-Tax quotas. Tax amounts for each circuit were determined based on conditions such as population, land, property, and degree of prosperity. The Two-Tax system inherited from the Tang dynasty had a seemingly advanced principle: expenditure based on income—setting collection quotas according to the previous year's revenue standards, then apportioning them across the realm.

While this reduced the court's troubles, because of the principles that "households, whether resident or guest, are registered by current residence" and "persons, whether adult or not, are assessed by wealth," it appeared to equalize rich and poor. However, it caused population mobility, and since quotas remained fixed despite changes in household numbers, it created a situation where the poor grew poorer and the rich grew richer.

After all, when population movement was not severely restricted, people naturally gravitated toward prosperous regions to make a living. With more people, the per-capita tax burden was diluted and each person paid less, while poor regions experienced the opposite.

Of course, if the Two-Tax Law had only drawbacks, it could not have endured for so many years without being abolished by successive dynasties. It was a tax system that could be adopted once a state's commodity economy had developed to a certain degree, and with its support, the commodity economy soared and social vitality was unleashed.

Tax quotas could be adjusted and enforced through the court's authority, but one of its most troubling drawbacks demanded serious attention: the problem of land annexation caused by free land trading. Under the Two-Tax system, this was an unavoidable issue.

At present, the situation was not yet severe—the population was still small and land was abundant—but in a few decades, it would be different. Therefore, to impose restrictions in this regard, it was decided to add a land transaction tax, levied heavily: for any land sale or purchase, both buyer and seller would each pay a tax of twenty percent.

On the land question, Emperor Liu had also thought deeply. The so-called "apportioning the poll tax into the land tax" was not an all-conquering weapon, and given the Great Han's current level of development, it was far from the time for such a step.

For now, the most appropriate approach was to adjust policies on the existing foundation, which could equally achieve great developmental effects and help the economy take flight.

Beyond the two measures above, other aspects also reflected the emphasis on agriculture. For instance, the grain price policy that had caused a stir in the Eastern Capital—for farmers who tilled the land, a rise in grain prices was the greatest benefit to them.

At the same time, the policy of building charity granaries and increasing public grain reserves throughout the realm served not only to guard against famine but also considered that in bountiful years, the government would spend money to purchase grain from the people at prices above market rates—killing two birds with one stone.

Additionally, since the government collected taxes primarily in currency, in this process, people lacking cash and silk were easily disadvantaged in transactions. Thus, a minimum price for merchants purchasing grain was set on a three-year cycle.

In short, the primary purpose of this Kaibao New Policy was to lighten the burdens of the common people. The farmers of the Great Han could be said to have received the best treatment since the founding of the state. And they deserved it—after all, over the past fifteen or sixteen years, it was through their exploitation that the state had gained the strength to establish its achievements and accomplish its great enterprise.