Budget and taxation

Your treasury is settled once a month, on the 1st. The budget pass computes income and spending for every nation, applies the net to the treasury, and then checks whether you have gone bankrupt or recovered from it.

Income#

Taxes are collected from pops, and pops are taxed by wealth bracket. There are three brackets — poor, middle and rich — and three separate tax rate sliders, one per bracket. Tax is taken from the money a pop is holding, which means a pop that spent everything on food contributes very little regardless of the rate you set.

Tariffs accrue through the month as your pops and industries trade, and are banked into the budget as tariff income. The tariff slider that generates this is the same one that raises your pops' cost of living — see The world market.

Production income is the state's share of what the national economy produced over the month.

Spending#

Spending is largely structural — it follows from what you own and what you have built, not from discretionary choices:

• Army upkeep, per regiment.
• Navy upkeep, per ship, slightly cheaper per unit than land forces.
• Construction, per province.
• Administration, which has two parts: a charge per province and a much smaller charge per head of population. A large empire costs more to run, and a populous one costs more again.
• Reform upkeep, per level of reform enacted. Reforms are not free once passed; they carry an ongoing cost.
• Factory subsidies, if you are paying them.

The administrative model is why unchecked expansion is not automatically good: every province you take adds permanent administrative and construction cost, and those bills arrive whether or not the province is productive.

Bankruptcy#

Bankruptcy is a state, not an event.

You enter bankruptcy when your treasury falls to -1,800. On entry you lose 4 prestige immediately and construction is blocked.

While bankrupt you lose a further 0.6 prestige every month, and factory subsidies are honoured at only 30% of their value.

You exit bankruptcy when your treasury climbs back to 550. Note the gap between the two thresholds: recovering is not simply a matter of crossing back over the line you fell through. You have to get meaningfully into the black.

Outside bankruptcy, the treasury has a hard floor of -30,000 and a soft cap of 600,000.

What this means in play#

• Tax rates and tariffs take effect on the 1st. Changing a slider mid-month does nothing until the next budget pass.
• Taxing the poor yields little and costs a lot. Poor pops hold little money after buying life needs, so the revenue is small while the unrest is real.
• Conquest has a running cost. Administration and construction scale with provinces held. A war that doubles your territory doubles a bill you pay every month thereafter.
• Reforms are an ongoing liability. Passing them is a budget decision as much as a political one.
• Bankruptcy is a spiral, not a setback. Blocked construction, bleeding prestige and gutted subsidies all make recovery harder. The exit threshold is well above the entry one, so act before you cross it.

See also#

• Population — who is taxed, and why their money runs out
• The world market — the other half of the tariff slider
• Production and industry — subsidies
• Politics and reform — what reform upkeep is buying