Let's talk about taxes.
It's a painful subject. Painful enough to feel like I'm cutting into my own flesh.
The wounds on my hands are finally healing nicely, and now I'm about to reopen the wounds in my heart.
Back when I lived in Japan, I paid taxes in two capacities: as an individual and as a corporation.
As an individual, I paid income tax, consumption tax, property tax, and inheritance tax. As a corporation, there was corporate tax, consumption tax, property tax, and all sorts of other taxes.
I left both to my accountants and the finance department, so I don't really understand the finer details.
Setting those aside, though, I basically paid both direct and indirect taxes.
The same general structure exists in Santeneri.
Direct taxes consist of a harvest tax and a property tax.
The harvest tax is the oldest form of taxation: one-tenth of the agricultural produce goes to the lord. The property tax is levied on houses, land, and livestock.
As for indirect taxes, there's a long list covering alcohol, tobacco, salt, internal customs duties, external customs duties, grapes, printed materials, and so on.
There is no general consumption tax covering almost every product.
Well, so far, so good.
Here's where things start giving me a headache.
First, the kingdom is divided into directly administered districts and regional administrative districts.
Directly administered districts are governed by officials dispatched by the state. However, the actual work of collecting taxes is contracted out to influential local figures.
Regional administrative districts, on the other hand, have their own independent tax systems. The state assigns each district a tax quota, which the district pays in a lump sum.
What exactly are these regional administrative districts?
Gaillure and Aquiane, that's what!
In other words, they're territories governed by great lords who retain substantial power of their own.
Countries within a country.
Remember how I mentioned internal customs duties among the indirect taxes earlier?
Well, because there are “countries” within the country, customs duties are imposed on goods moving between them.
And among these regional administrative districts, some retain genuine autonomy while others have become little more than administrative shells.
I suppose that second category isn't particularly easy to understand, either.
I don't really understand it myself.
These are territories that formally remain regional administrative districts but operate under the same tax system as directly administered districts.
A prominent example would be the Duchy of Delroise, whose ruling house effectively controls the Army of the Kingdom of Santeneri.
There are various smaller territories in the same situation.
Anyway, both types of district have their own direct and indirect taxes.
Direct taxes are relatively easy to picture, aren't they?
Imagine a farmer loading his harvest onto a wagon and delivering it to the local government office.
In practice, the taxes are paid in money, but you get the general idea.
Indirect taxes are where things become troublesome.
Take modern Japan's consumption tax, for example.
Something with a listed price of one hundred yen before tax costs one hundred and ten yen with tax included, right?
Ten yen in consumption tax.
The company selling the product initially collects that money, then pays it to the government on behalf of the individual purchaser.
Strictly speaking, companies sometimes pay in advance rather than afterward, and there seem to be various ways of understanding how the whole thing works.
But for now, all you need to understand is that the company selling the product pays the tax on behalf of the individual.
So does Santeneri do the same thing?
No.
We don't have the manpower.
Our accounting records aren't particularly precise, and it's not as though we have receipts for every transaction.
The state has neither the administrative system nor the personnel required to determine how much every individual or business has sold and then audit their accounts.
So the state makes a rough estimate, decides that the amount ought to be somewhere around that figure, and collects it.
From whom?
Our friends the tax farmers.
These people pay the estimated amount in a lump sum.
In exchange, we give them the right to collect the actual taxes.
Oh, and since they also occasionally agree to accommodate the state's unreasonable demands, we give them exemptions from both direct and indirect taxes as well.
Generous, don't you think?
But there's more to it than that.
You see, these tax farmers possess the right to collect taxes on the state's behalf.
That means they have a stable source of enormous revenue.
So they use those collection rights as collateral to issue interest-bearing bonds.
People with a bit of money buy those bonds.
Money comes pouring in.
Enormous amounts of it.
And then the tax farmers lend that enormous amount of money to the state.
With interest, naturally.
In other words, they're essentially government bonds issued by private individuals?
Oh, the government issues bonds of its own, too.
But our debt is so horrendous that nobody wants to buy them.
They're speculative investments.
So who exactly are these tax farmers?
They must be incredibly wealthy people, right?
Gaillure and Aquiane, that's who!
Of course, there are plenty of others.
Some are commoners.
But the biggest players are great nobles like those two houses.
◆
Just listening to all this gives me a headache.
Tax collection systems are terrifying, aren't they?
I already found the Japanese system pretty incomprehensible, but Santeneri's is on another level entirely.
There are so many layers of subcontracting that I can't even tell how far down the chain it goes. Every contractor and subcontractor has a separate fixed-term agreement.
Impossible.
Anyway, to put it in the broadest possible terms, we want to consolidate the whole thing.
We want to eliminate the countries within our country and establish a unified national tax system.
At the same time, we want to bring the work currently performed by tax farmers under state administration.
The tax-farming system essentially allows private intermediaries to skim money off tax revenue.
If we could eliminate that, the state's tax revenue would increase enormously.
Now, how do you suppose we could accomplish this?
There's a simple solution.
Destroy the autonomous territories that function as “countries” within our country.
By military force.
Could we do that?
Of course not.
It would mean full-scale civil war.
We'd be inviting an all-star lineup of the Central Continent's great powers to intervene from every direction.
Furthermore, although I've mentioned that House Delroise provides the core of the kingdom's army, not every soldier serves under its banner.
Many officers are nobles who hold lands in Gaillure, Aquiane, and other great territories.
The army would split apart.
The Royal Guard?
Far too small to accomplish anything.
But let's suppose that, by some miracle, we managed to destroy those territories without inviting foreign intervention or splitting the army.
What would happen then?
The tax-farming apparatus would disappear.
Acquiring the land would accomplish nothing on its own.
We'd have to generate revenue from it.
Would the influential local figures who had previously handled all that secondary and tertiary subcontracting be willing to cooperate?
That would be difficult.
They'd realize they were next, wouldn't they?
So we have to proceed very, very slowly, until one day everyone looks around and realizes the change has already happened.
The first step is abolishing the internal customs duties between the kingdom and the Duchy of Gaillure.
By removing taxes that obstruct the movement of goods, we hope to expand trade.
And if trade expands, tax revenue should increase.
For both the kingdom and Gaillure.
Of course, that's only the theory.
From the perspective of the Duchy of Gaillure, there's no particular reason to surrender a guaranteed source of revenue in exchange for an uncertain opportunity.
Above all, it would be the first crack in the duchy's independence.
I requested that concession from the Duke of Gaillure in exchange for taking Lady Zofi under my guardianship, and he agreed.
Oh, this wasn't some dramatic agreement reached out of the blue during a summit between our two leaders.
Our officials had already held repeated negotiations on the subject long before this meeting.
Nor will the change take effect immediately tomorrow.
It will be implemented around the time my guardianship comes to an end.
◆
Eliminate the “countries” within our country.
Find a way to deal with the various interested parties who issue government bonds as private individuals.
Have the state take over their role.
That's one possible end goal.
But to accomplish it, Santeneri itself must become a proper state.
Why do countries exist within our country in the first place?
Probably because, even though Santeneri is recognized as a single kingdom, it's also perceived as one enormous “Grand Duchy of Leroy.”
From the perspective of someone familiar with modern Japan, the Kingdom of Santeneri seems like an extraordinarily distorted organization.
After all, the Steward, who stands at the top of the state's administration, is quite literally the head servant of House Leroy.
The military has been almost exclusively the domain of House Delroise, our allies and relatives for centuries.
The Interior and Foreign Affairs ministries are somewhat better, but even those offices are passed around among a handful of families.
The Royal Guard belongs to House Barois.
The Comptroller's office is about the only major institution that's relatively open to outsiders.
To one degree or another, every important institution of the state is a hereditary family office belonging to House Leroy, its relatives, or its retainers.
Generation after generation.
Perhaps the Comptroller's office is more open because it was established relatively late.
I imagine financial affairs originally fell under the Steward's authority.
This goes far beyond ordinary hereditary succession.
The state is an enlarged version of House Leroy itself.
And the symbol of House Leroy is the king.
In other words, me.
Consequently, harming me means harming House Leroy, which in turn means harming the state.
Now, let me explain how state policy is decided.
All policy decisions are made by the royal council.
Each department prepares its proposals, which are then discussed at a meeting of the various lords and ministers before being submitted to me.
I then issue a royal decree.
That decree is sent to an organization known as the Assembly of Nobles, where it receives approval and becomes law.
That last part is important.
The Assembly of Nobles.
Essentially, it's a gathering of nobles who belong to houses other than House Leroy.
The very existence of this approval process reflects Santeneri's origins as a collection of feudal territories.
Incidentally, the process has become almost entirely a formality.
After all, houses on our side, such as House Delroise, which holds the office of Lord of the Army, House Froisbourg, which holds the Stewardship, and House Barois, which controls the Royal Guard, are also noble houses.
The enormous number of families that nominally hold seats in the Assembly of Nobles have, for the most part, been absorbed into our side.
Of course, some houses haven't been absorbed.
Those are the ones that remain as “countries within the country.”
If the territory of the Kingdom of Santeneri corresponded exactly to the territory of the Grand Duchy of Leroy and its subordinate lands, there wouldn't be a problem.
Likewise, if Gaillure and Aquiane were independent kingdoms, entirely separate from Santeneri, that would be fine, too.
It would be easy to understand.
But in reality, both Gaillure and Aquiane have become fairly thoroughly integrated into the Kingdom of Santeneri while simultaneously retaining their identities as feudal principalities.
Aquiane is a particularly egregious example.
That house is a direct branch of the royal family, for goodness' sake.
It's a perfect demonstration of why simply parachuting a new ruler into a formerly independent territory doesn't necessarily work.
What I want, essentially, is for the independent houses to genuinely think of Santeneri as their own country.
That's all.
You know how, when two banks merge, the employees who came from the former Bank A and those who came from the former Bank B sometimes continue fighting one another?
They can't let go of their old allegiances.
For Gaillure and Aquiane, the Kingdom of Santeneri is still, somewhere in their minds, the Duchy of Leroy that they once struggled against.
I want to change that perception.
I suppose we'll have to rearrange the seats on the board of directors.
Make sure people from Gaillure Bank and Aquiane Bank get proper representation.
And dilute the influence of the former Leroy Bank.
Then we can build a Kingdom of Santeneri that everyone regards as our kingdom.
Dismantle the Grand Duchy of Leroy and rebuild it as the Kingdom of Santeneri.
Nobles and commoners alike will become citizens of the Kingdom of Santeneri.
And the king will serve as the point that binds them all together.
Lately, I've been discussing ideas like these with the Steward and the others.
It's my answer to their demands for a vision.
They're all exceptionally capable people, so deep down, they already understand.
But the Kingdom of Santeneri has taken its present form over the course of a very long history.
The grudges between its various houses run deep.
It takes courage to push these changes forward.
Gaillure, Aquiane, and the other great territories must understand that much themselves.
If Santeneri collapses, they'll go down with it.
Everyone knows what needs to be done.
They just don't want to do it.
All I can do is give them the push they need.
Oh, and if this general direction works out, I'll be able to achieve my personal goal as well.
I can become a purely symbolic figure.
The symbol of national unity.
Wait.
I feel like I've heard that phrase somewhere before.
◆
For the time being, I've decided that Lady Zofi will continue living at her family's residence in the royal capital.
The Duke of Gaillure said something along the lines of, “We would be delighted if you would keep her close to you at Palais Lumiere.”
But I firmly refused.
There are several reasons.
First, even if she came to live here, I wouldn't have much time to spend with her.
Lady Braune and Lady Mary are formally employed as ladies-in-waiting, so I have plenty of opportunities to interact with them.
But I can't possibly make Lady Zofi a lady-in-waiting.
A king's entire day, from morning until night, is work.
If Zofi had no official duties, I'd end up leaving her alone all the time.
It would be much better for her to stay at her family's residence, where she can spend her time as she pleases.
The next reason is also a serious one.
The court's operating budget is, well…
You know.
I can't actually say that, of course.
If I did, the Duke would undoubtedly reply, “In that case, Gaillure will bear the expense.”
There are appearances to maintain.
House Leroy is still a noble house, after all.
I can't have people seeing us as a symbol of the kingdom's financial difficulties.
And finally, there's the biggest reason of all.
The one I absolutely cannot say aloud.
Fourteen is really pushing it.
My physical age is twenty.
Even so, we're talking about a university student and a middle schooler, so it's out of the question.
At a stretch, perhaps we could manage something resembling a relationship between an older brother and a younger sister.
But my mental age is considerably higher.
It's much closer to a father and daughter than a brother and sister.
Very much closer to the former, in fact.
When I look at her, I do think she's adorable.
But that's not because I see her as a potential spouse in any real sense.
It's the same kind of affection you might feel when watching a young idol on television.
To be perfectly frank, Lady Mary and Lady Braune are fairly difficult for me to deal with in that respect, too.
It's only manageable because they look like working adults.
In company terms, Lady Braune would be a fresh graduate, while Lady Mary would be in her second or third year on the job.
Of course I'm happy if they like me.
But I'm also extremely cautious around them.
You know how talking to a newly hired graduate can make you a little nervous?
That sort of thing.
They're all intelligent, and the differences in our social standing help keep our relationships within manageable boundaries.
That's about the only reason things work at all.
For the sake of my own peace of mind, I'd like Lady Zofi to wait at least another six years or so.
But if I made her wait that long, her father, the Duke of Gaillure, would undoubtedly start harboring suspicions.
So, after making concession after concession, we've arrived at another three or four years.
In truth, the age range I'd personally feel most comfortable with is somewhere between the late twenties and the mid-thirties.
But here in Santeneri, there are hardly any unmarried women of that age.
Besides, from the perspective of society—or rather, from the perspective of my physical age—it would look like something resembling a young man being financially supported by an older woman, rather than the other way around.
It's surprisingly painful.
Well, even if I did find my ideal woman, I wouldn't be able to do anything about it anyway.
Because everything is political.