Chapter 1860: Reasonable Tax Avoidance

After a long moment, Pan You's expression calmed. Looking at the smug Dang Jin, he dismounted by the saddle, stepped forward a few paces, and bowed with his whip in hand: "Marquis Dang understands the greater good, and I admire that. If you can actively cooperate with the government's administration, I would be most grateful. Even if I had come on foot rather than horseback to show my respect, that would have been only fitting."

Pan You's shifting expression gave Dang Jin great satisfaction, but seeing him quickly adjust his mindset and put on this display, he could not help but be surprised. Taking another serious look at him, Dang Jin remarked with no small mockery: "I misjudged you! Governor Pan is indeed a man of stature, with such tolerance!"

Pan You smiled faintly, turned sideways, and said to the assembled subordinates behind him: "Marquis Dang has given his word. You lot should carefully survey the land—make sure it is measured thoroughly, and don't let Marquis Dang's goodwill go to waste!"

Then he turned and instructed the County Magistrate of Yangzhai: "Call up everyone available in your county office. I will remain in Yangzhai and wait for the results!"

"Yes!"

Silently watching Pan You issue his orders, Dang Jin's old eyes were full of quiet contemplation. When Pan You turned back, Dang Jin also waved to those behind him. Soon, another group emerged from the manor, orderly taking their places behind Dang Jin—a dense crowd of some seventy or eighty people.

Under Pan You's surprised gaze, Dang Jin calmly instructed: "The government wants to survey the land, so you all cooperate properly. Get your land figures straight—neither less nor more. From now on, taxes will be paid according to the new tax regulations..."

"Yes!" The crowd responded in unison, their voices neat and resounding, as if receiving military orders.

And as Dang Jin gave these instructions, Pan You immediately realized what he was up to—this Dang family had long since planned for this.

Policies may come in a thousand forms, but so do the countermeasures below. The Great Han has never lacked clever people. As the tax reform policy was confirmed and gradually implemented, the vested interests, upon realizing the tide could not be turned, decisively adopted circuitous methods to reduce their losses.

Concealing land was a common practice, but not a clever one—after all, if truly investigated, it could not be hidden. So many people began to scheme around the new tax system itself, trying to find loopholes in the established rules and exploit them to stop their losses.

And under the new tax system, there really was a rather obvious loophole to exploit. Under the rule of taxing by land quantity tiers, the more land one owned, the heavier the land tax. Thus, reducing the amount of land registered in one's name was a fine tax-avoidance method—within the rules, and highly feasible.

So, over the past few months, in the four circuits where tax reform had been first implemented—the capital region, Henan, Jiangnan, and Yulin—the landowners, as if by unspoken agreement, were all doing the same thing: during the government's land surveying process, they urgently operated to distribute their surplus land to clan members, retainers, and tenant farmers while retaining a certain amount for themselves. Moreover, they very precisely kept each household's fields at the tax-tier standards of 60 mu, 100 mu, 150 mu, and 200 mu.

This was almost a perfectly legitimate and reasonable tax-avoidance method. And it was easy to imagine that although the land was distributed away, its actual control clearly remained in the hands of those powerful families, landowners, and local magnates. They had no fear of losing it, for as magnates, their most basic quality lay precisely in their local influence and control.

The court was naturally well aware of all this, but showed no intention of stopping it. After observing the situation, Pan You was quite dissatisfied, feeling that letting the landowners do this would cost the court a considerable amount of tax revenue. Therefore, he decisively ordered a ban on the "gifting and transfer" of land in the capital circuit.

This order naturally provoked widespread discontent among the landowner class. The disputes were passed all the way up to the court, and after some discussion, it was decided to tacitly accept the matter.

The reasoning was simple: such practices did not violate the rules, nor did they deviate from the new system. In the words of some prominent gentry: they had neither stolen nor robbed, and they were cooperating with the court's administration. The land was theirs, and how they disposed of it was their own freedom. For Pan You to forbid it was simply too tyrannical.

Since the court had established the tiered taxation rules, it had given people room to operate in this manner. The court could certainly issue bans for the sake of tax revenue, but on one hand, the difficulty of auditing land ownership was plain to see—Zhao Pu had always adhered to one principle: the simpler, more understandable, and more executable a policy, the better. On the other hand, a ban would not convince the masses.

Of course, convincing the masses was secondary. The key point was that the court's purpose in implementing the new system was to change the nature of taxation and the basis of tax assessment—to shift from poll tax to land tax, and to a certain extent lighten the burden on the broad masses of farmers.

As for land ownership, that was not the focus. After all, regardless of who owned it, the land was there, and the tax standards were clear—however much land one had, that much tax one paid.

And while the big landowners' practice of transferring ownership to avoid taxes would indeed cause some loss to the court's revenue, it counted as reasonable tax avoidance, within the rules. The rules were established by the court, so naturally they had to be upheld—unless the court changed the existing rules and completely banned the buying and selling of land, but that was obviously unrealistic, even harder than the tax reform itself.

Against this backdrop, one thing could be foreseen: in the future, a large portion of the Great Han's land operators, besides paying the court's regular taxes, would also need to hand over a certain "share fee" to the old landowners.

As for how much, that would depend on their private arrangements. And if this situation developed over the long term, local personal dependency based on land would become even more severe.

For self-cultivating farmers with small amounts of land, the new tax system was friendly. Compared to the Two-Tax System, the taxes they had to pay each year genuinely decreased, and their burden was greatly lightened.

But for those small farmers and households of a "tenant" nature, it was not necessarily so. The court's regular tax was based on land quantity, while the landowners' private tax depended on the landowner's "conscience"—but how could a feudal landowner's conscience withstand such a test?

For this portion of farmers, if they encountered an excessively greedy master, under the double tax burden, their hardship could well be imagined. New land conflicts would breed anew.

Although the Great Han's current land situation was far from reaching such a point—the Great Han still had self-cultivating farmers as the majority—the development of some things follows its own laws, and some trends are even irreversible: self-cultivating farmers going bankrupt, losing people and land, and land annexation continuing.

No matter how much reform was done, in the end it was only improvement. As long as the fundamental problem of feudal land ownership remained unchanged, the future of the Great Han Empire was also foreseeable.

Perhaps it was precisely because he saw these things that Emperor Liu, upon learning of this situation, had once wanted the Hall of State Affairs to issue a decree: land registered in the records must have clear ownership, and the court would protect that ownership.

Emperor Liu's intention was simple: if you want to avoid taxes by distributing land, then once the land is distributed, it belongs to the recipient. At least legally, that land would no longer be the original owner's. If any land ownership disputes arose in the future, the government should adjudicate according to the registry records.

However, this provision was rejected by Zhao Pu, and the two even had a rare argument over it. Zhao Pu's thinking was very pragmatic: if they followed Emperor Liu's intention and issued such a decree, it would be like pulling the firewood from under the cauldron—cutting off the roots of all the landowners under heaven. It would inevitably provoke widespread discontent and even resistance, dealing a serious blow to the tax reform that had gradually been getting on track, creating unnecessary trouble, and harming the overall situation.

Emperor Liu insisted that beyond the court's regular taxes, the landowners could still collect private taxes—how could this accord with the court's established system? If this continued, the state would cease to be a state. Zhao Pu expressed agreement with Emperor Liu's view, but he still refused to issue the decree.

After much argument, it ultimately ended with Emperor Liu's compromise, for just four words: the overall situation takes precedence. The tax reform had been implemented according to Emperor Liu's will, and the new system had received his approval. That it had reached its current state with new problems and drawbacks appearing was something reform must bear.

It was precisely this compromise that made Emperor Liu realize he was like a man trying to hold back a flood—exerting all his strength, yet the tide still surged forward, unstoppable. He could hold the line while he lived, but what about after him?

"After I die, what do I care if the flood rages to heaven." Emperor Liu gained a new understanding of this saying—he wanted to manage it, but truly could not, could not manage enough. The older one grew, the more one felt one's powerlessness.

Perhaps feeling he had offended Emperor Liu, Zhao Pu later privately suggested to him that for the sake of reform, necessary compromises were acceptable. If Your Majesty was so inclined, he could wait until the tax reform was complete before making further moves—in the future, the role of the land registry could be amplified.

To this, Emperor Liu reluctantly accepted, but said with little enthusiasm: "And how much time do I have left?"

Emperor Liu had long realized that this tax reform—let alone two years—might not be thoroughly completed even in three or five years. One only needed to look at the progress in the pilot areas and the disputes within them to know.

Reform on one side, compromise on the other! That was Emperor Liu's summary of this tax reform in his heart!