Volume 1 - CH 182

Chapter 0182 <<Intermission>> Consumption Tax

Translator: Tseirp

Marcdorf, the imperial capital of the Debuhi Empire.

In the office of the Imperial Castle, Emperor Rupert VI received Count Hans Kirchhof’s report.

“Loris, the Duke of Inbury, his family, and his companions have safely entered the Imperial Castle. Tomorrow, we will announce their asylum to the nobility and then transfer them to the mansion.”

“Good work. It’s better to get them out of the Imperial Castle quickly before the foolish aristocrats start acting. They should be able to relax a little at the mansion.”

Of course, Rupert didn’t say that because of typical kindness.

However, he is not so devilish as to immediately try to use a person who had just lost his country.

You let them concentrate on recovering when they are weak, and work them when they are well.

(If you abuse them while they are weak, they may die before you get sufficient results. It’s the same as fishing.)

Rupert thought, remembering the live bait fishing that he did long ago when he was still young.

“And Your Majesty, I have a summary of the economic situation of the whole Empire.”

“Hmm. Is the economy decline continuing smoothly as planned?”

Hans nodded, even though he had terrible doubts about how to use the word ‘smoothly’.

“Yes. In all fields, activity has been stagnant for over a year …”

“But?”

Rupert urged Hans by adding the last word he seemed to want to add.

“Some treasury officials have said they want to appeal to Your Majesty the Emperor …”

“Hmm. What was his name … Yes, Lorenz. Was it Lorenz Kush?”

“Exactly! Excellent guess.”

Rupert grinned and Hans was very surprised.

Lorenz is still a young finance bureaucrat in his twenties, and he hasn’t done anything special.

Of course, he is an excellent man who works steadily, negotiates with the public to formulate a budget, often goes outside the Imperial Castle to check the actual situation with his own eyes, and makes various proposals.

To that end, he is one of the people Hans kept an eye on and trained as a human resource who would lead the next generation.

However, Rupert is an Emperor. He bears the supreme crown of a vast and mighty empire.

To be clear, he is in a position where he cannot afford to spend time and be conscious of trivial matters.

Even though he is a good finance bureaucrat, Rupert knew the name of that young man and even speculated that he might be the proponent.

That was astonishing.

“So what is the content of his report? Is it about economic stimulation measures?”

“Yes. He reported that the economic downturn has been prolonged and the people are suffering …”

“Hmm. It may be better to explain it properly once. You should bring him tomorrow.”

“Understood.”

The Emperor, who has an almost murderous schedule, still chose to make time to bring him in.

Hans, though feeling ashamed, promised to bring him.

“For the time being, we will maintain the state of recession.”

“Yes, that’s fine. However, we will continue to provide the people with the minimum necessities of food, clothing and shelter. Yes, it was recorded on ‘that’. The word ‘Bubble burst’.”

Rupert said in an ironic tone.

“You’re referring to that ‘stone slab’? The ‘stone slab’ that has been used by generations of Emperors, that contains a lot of knowledge, but … is useless for the administration of the country.”

“Well, it can’t be helped. It was written only by a citizen. Even more so when it comes to economy and policies at the national level … the previous emperor also said that it couldn’t be used in that field at all.”

Rupert laughed loudly.

“What was it … yes, I was really surprised when I heard about the tax called ‘Consumption tax’. I wonder if there really is such a foolish country that incorporates such an aspect into the national tax collection system.”

“But, ‘that’ said that quite a few countries had introduced it.”

“I thought it was something different from the economy we perceive, but that wasn’t the case. The ones involved in economic policy-making were just foolish. A tax on all consumer behavior, the more you consume, the more tax you will have to pay … taxes that curb the consumption behavior of all citizens … Of course, I could understand if tax rates are altered due to economic fluctuations, but that was not the case. It’s always constant. So thoughtless.”

Rupert ridiculed the system.

“But why would so many nations adopt such a foolish policy?”

“That’s easy. Because the people who make the budget want to have it easy.”

Rupert answered Hans’s question with the expression that he shouldn’t ask the obvious.

“With a ‘Consumption tax’ policy, it will be easier to predict tax revenue without much influence from the economy. It also means that it will be easier to make a budget. If all taxes are influenced by the economy, the budget will be terribly difficult to draft. But because it’s difficult, the policymakers are respected because they can perform difficult tasks. If you abandon that, nobody will respect those who organize the budget. Take Lorenz as an example just now.”

Once again, Rupert’s expression showed ridicule toward people from another world.

“But is it possible to get rid of that ‘Consumption tax’ after decades of being firmly incorporated into the national organization?”

“Well, what the country should do is create and maintain an economic boom, but they do not understand that foundation. If all consumption behavior is suppressed, the economy will worsen … and the ‘Consumption tax’ causes that. If you try to eliminate the tax, the next question will definitely be asked. ‘Where will the financial resources come from?’”

“So where will the money come from?”

Hans asked with interest.

“There is no such thing.”

Rupert grinned and continued.

“You’re going to cut taxes to stimulate the economy? What are the alternative financial resources for the tax cuts? Are you going to raise taxes elsewhere to make up for it? Then, after all, it won’t stimulate the economy. In the end, there is no alternative financial resource. That’s why we issue government bonds to cover it. That’s why we have to make the economy boom to increase tax revenue.”

“Issuing too many government bonds will affect the country’s reputation …”

When Hans said so, Rupert laughed loudly.

“The question is what is the credibility of a country based on? The credibility of a country is decided by others based on the ‘power’ of that country. It is never the amount of debt of the government of that country.”

“Power …”

“Yes, power. Military power and economic power … Well, science and technology power including alchemy that supports them. In order not to lose such ‘power’, the country will make policies. In some cases, the country may even hinder competition. But what about it? Isn’t it better to do so than let the people compete freely and cause the citizens misfortune? Doing so will mean a failure to properly evaluate the priorities of a country.

“Such as the domestic manufacturing subsidy provided by the Empire. A subsidy to prevent manufacturing factories from leaving the country.”

“Yes. The Empire is a big country. The national salary is high. It is better to set up a factory in another country where labor costs and material costs are lower and export the products manufactured there to the Empire, providing cheaper products. It is natural that some companies would think that way. However, if something happens in the Empire, the goods will not reach the country. The people will be unhappy. That is why the country subsidizes domestic production during normal times. The country must take the initiative to make it more profitable than producing in another country. That will make the country resilient. It is related to military power, economic power, and science and technology power, the one field called domestic production.”

“I agree.”

“But from a different point of view, these can be said to be the nation’s leeway. That’s what it means to maintain the ability to respond in the event of a problem, even during peacetime. And this can be called a kind of a ‘waste’ of resources. It is terribly difficult to maintain a policy that looks wasteful during peacetime because people who do not know anything will always call to ‘Eliminate waste!’”

“Yeah … you said it. Even the young bureaucrats say that often. But they will panic when something unforeseen happens …”

“It can’t be helped because it’s that kind of thing. If you don’t have any experience or imagination, you can’t help it. If you experience that ‘waste’ is what will save your life in an emergency, it changes matters but … it’s difficult. Well, maybe because it’s called wasteful? Perhaps change the wording? Call it redundancy? Greater redundancy … bigger? I don’t know about that … but maybe it would be better to call it redundancy than wasteful?”

“Unfortunately it doesn’t change much …”

Rupert joked, and Hans shook his head to answer.

“Well, back to the credibility of a country, if it is a strong country, to be clear, no matter how much government bonds are issued, the credibility of the country will not collapse.”

So Rupert took a breath and then continued.

“Maintaining a country that has all of that is not an easy task. When the people involved in the operation of a country begin to take it easy, the future of that country begins to decline. The destination is always the same.”

“What?”

“War or civil war. There is no other endpoint in history.”