Extortionate Taxes.

"Of all the people who contributed to the early prosperity and survival of House Aurellion, the two who needed to be thanked the most was the Grandmaster of Loyalty, Leon Mantelon, who helped to maintain the loyalty of House Aurellion's soldiers and the reason for the last heir's survival and the then Baron Malwin Thornsworth who worked tirelessly with what little resources he had to slowly build up House Aurellion's immense financial strength."

"From educating the next generation to bringing his genius like managing expertise to the noble houses' domestic affairs, the entire reason why House Aurellion's elite military could maintain its terrifying strength is all due to the efforts of this one man."

"He meticulously sowed the seeds that would sprout into a great tree that would overshadow land hundreds of miles long."

Silas Scriptron, renowned historian, and scholar in The Kingdom of Arthurus.

….

6 months in the game had passed since the servers opened and an entire month in real life, and despite his large amount of in-game resources, Reginald still refused to take any money out as he had already set aside enough for a month or two. Unlike most university students who spend a lot of money on alcohol and clubbing with their friends, the introverted Reginald did not, allowing him to save a lot of money that now came in handy as it could be used as a buffer so Reginald could focus all his in-game assets into developing his power and resources within it.

The intelligent player knew that the beginning of the game was when you needed to invest the most, whether it was buying shops to sell in-game items and goods, setting up a second caravan, or investing in his military-industrial complex and intelligence network, each project needed a large capital base.

After all, his preparations during his last Dynasty History Event paid off massively down the line once the time skips were implemented, which gave Railius far more resources to work with than an average player would typically have.

In the game, House Aurellion made tens of thousands of gold. If he turned it into real-life money, he would have hundreds of thousands of pounds by now, but instead, he decided to reinvest this money into the game as he had long realised its potential and focused on expanding his power in the game more than anything else.

House Aurellion currently had 3 primary sources of income.

The first was Sigismond Security Service, and until Kaila used her contacts over the last few months to build up a respectable business, it was House Aurellion's most profitable enterprise. With 8 years of history, it had built up a reputation as one of the kingdom's best mercenary and protection companies, as few could match the elite Pelican Guards when it came to combat and allowing them to charge premium prices for their services.

The rich city councillors and other notable people with a lot of money were willing to pay 5 gold per week per person, giving more than enough for the mercenary to live well while also providing a modest profit for the mercenary company.

This added up to 260 gold per year per person guarding a notable, and with 500 of the now 1500 members of Sigismond Security Service guarding notable people, even after taking out 12 gold for the mercenary to live well, House Aurellion still makes a profit of 248 gold per year per person.

This alone brings in 124,000 gold for House Aurellion, not counting the activities of the other 1000 members who take on more risky assignments of guarding the cargo of both merchants and nobles.

Over the last few months, according to Railius' plan for expansion, Leon had been increasing the number of Pelican Guards. He also sent an order to Darius to start recruiting mercenaries, making sure that those who get Pelican Guard training are loyal but still wanting the mercenaries not associated with House Aurellion to be better than the average. After all, they now had a reputation to uphold for being a gathering of elites and had to maintain it, but each recruit was meticulously screened to ensure they got the most loyal people they could. 

While allowing members not affiliated with House Aurellion into the security service was risky, Railius thought that having some not affiliated with him would help the security service keep its cover. After all, while Railius could secretly control it from behind the scenes, he did not want it ever to be able to be connected with House Aurellion, as even if a few members were exposed, people would just think them to be spies planted by Railius while if the entire company continued to have mysterious origins, it would not take long for people to take note and investigate the background of its members.

The longer the cover is kept, the harder it will be to connect the sudden emergence of the security service 8 years ago with House Aurellion's flight from the Chavarian Empire. Railius hoped that by the time he revealed his identity, which he expected to take a few in-game years, and Leon was inevitably exposed; people would have forgotten about that security service.

Railius could imagine how Amulius managed to find their location; it was likely in the same way that the crown prince of Nathia Kodjis Kendari did by matching the ages of Quinten and master Zhou to Railius and Leon and the sudden emergence of a company of elites.

Like the Nathian crown prince, Amulius knew that Leon and the Pelican Guard would want to stay close to Railius to protect him from the Chavarian Empire and its agents, which were constantly hunting them down. So, Sigsmond Security Service and Master Zhou's dojo had to be ways for Leon and the Pelican Guards to blend in seamlessly with society, staying low-key to avoid detection, which had worked very well so far.

It was done so well that if someone were not explicitly looking for the signs of House Aurellion and were intimately familiar with them, they would be missed entirely.

After all, there were many ex-soldiers retiring from the Chavarian Imperial Army once Lucius Aurellion died. So it helped to hide them all the more as you would have to check every batch of soldiers from that time to find them who were scattered across the world, finding jobs from mercenary work to retiring as a farmer.

The second source of income was Leon's Dojo, which also happened to be a great place to gather information. The sons of merchants and low-ranking officials who could not afford a master fighter to train them and did not want them to join the Nathian military sent their sons there to learn from Leon, who was under the alias of Master Zhou, a wondering master fighter who decided to settle down and take up teaching.

Some positions in the dojo were reserved for those connected to Master Zhou as Railius does, but the rest were sold and auctioned to people. To buy one of the few guaranteed places at the Dojo, you had to pay 500 gold per person per year, a paltry sum for many merchants without a master fighter as most either came out of the landed nobility or were in the military.

This is because it is extremely hard to become a master fighter as you need both talent and the right upbringing to become one, even if you spend your entire life fighting on the front lines, as out of the thousands of veterans that leave the armies of the various nations around the world, only a handful were masters hell out of House Aurellion's nearly 1500 Pelican Guards who followed Railius to Nathia some of the best soldiers in the game currently only Lucian managed to become a master fighter the others even the vice commanders were still at the expert rank even if it was at its apex and were on the verge of breaking through to becoming masters. 

 While being taught by a master increases your chances of breaking through to the master, it was not a guaranteed done deal.

Grandmasters were even rarer. After all, most royal and imperial families only had 2 or 3 grandmasters under their command, let alone everyone else!

This was why there was stiff competition for the places at Leon's dojo. Some auctioned places went for 1000 or more gold, giving House Aurellion a modest profit to help them fund their other costly projects.

The third source of income was the many taverns, inns, and other entertainment establishments that House Aurellion had bought and built throughout Nathia over the last eight in-game years since the noble house moved to Nathia.

Each noble's territory had at least one establishment in it, and this was where the majority of the money House Aurellion had made had gone to during Railius minority as House Aurellion kept its movements small and low key until their lord had come of age and ordered the noble house's mass expansion.

These did not make much money, as the places that made more money had to subsidise those that made a loss. This did not include the weapons, armour, and other things bought and stored in these safehouses and fronts, which took up what little money was left over.

Railius opened a report sent to him by Baron Malwin, the person currently in control of House Aurellion's domestic affairs and the one responsible for recording all the noble houses' financial transactions, making him stay up many nights as late as he had to do that in addition to teaching his students luckily a few of them were approaching their late teens and could start to help reduce his workload as many of the children of the Pelican Guards were younger than Railius and Jordis was with only one or two being older. Those few were already serving the noble house in one way or another.

Apart from the details for Quinten's Quality Wares that he could get from Kaila at any time, he had to rely on Malwin's report to keep up to date on House Aurellions' other dealings. His talented subordinate made the reports a relatively easy read by thoroughly breaking down all the aspects for Railius.

Unlike in many other games where you can bring up a screen to find out your expenses, the only way for a player in the game to have a complete view of their assets, income, and expenditures was through reports like these, which would be sent to the CEO of a company from their accounting or financial department.

Because of the rapid expansion of House Aurellion, he had two reports on his bedside table in his room in the Kingdom of Rinada, the first target for House Aurellions expansion into the nations surrounding Nathia. One was for Sigismond Security Service, which was a monthly report, and one was for Leon's dojo, which was a yearly report. Unlike Railius' mercenary group, the revenue and expenses of the dojo are fixed, making it much easier to calculate than the mercenary groups, which are constantly changing. 

….

Sigismond Security Service Financial Report for the of July 4007 ASA (Monthly report):

Revenue:

Protecting Notables: 10,833 gold, 3 silver, 3 copper

Protecting Merchant and Noble Caravans: 20,000 gold

Other Mercenary Work: 10,000 gold

Total: 40,833 gold, 3 silver, 3 copper

Expenses:

Salaries of Mercenaries: 1500 gold

Replacement Equipment and Equipment Upkeep (weapons, armour, mounts, tents, etc): 3000 gold

Miscellaneous Expenses (food accommodation, medical expenses, etc): 3,000 gold

Profit/Loss: 33,333 gold, 3 silver, 3 copper.

….

Leon's Dojo Financial Report for 4007 ASA (Yearly Report):

Revenue:

Paid Placements: 10,000 gold

Auctioned placements: 20,000 gold

Expenses:

Upkeep and purchase of replacement training gear: 2000 gold

Gross Profit/Loss: 28,000 gold

Tax: 16,800 (60%)

Profit After Tax: 10,000 gold

….

The money made from the various entertainment establishments was only enough to cover the expenses of the whole network, as some places even made a loss due to the need to buy and upkeep a variety of weapons and armour while also paying tax on the income made on that land to the local lord not to mention the large amount of free food and accommodation they gave to members of the Sigismond Security Service.

The economy of the Kingdom of Nathia worked very similarly to the economy of the European feudal medieval world mixed with Imperial China and was very decentralised in its nature. The landed nobility had significant autonomy over it within their territory. There was a reason why Leons Dojo's gross profit was taxed while the mercenary group was not.

Kings taxed the dukes and landed nobility directly sworn to them, and then those dukes and lords taxed the nobles and subjects under them and so on and so forth.

The revenue of the king and the landed nobility came from a few places, but they primarily came from 3 main areas.

1. Taxing their vassals

2. Revenue from their own demesne

3. Any money gained through fines or punishment for crimes.

Unlike travelling merchants and caravans, who only had to pay customs duties for goods sold and tolls for passage, people who owned land had to pay money or produce to the local lord according to the tax rate set by that particular lord.

The Duke of Detarnor, known for his borderline tyranny, greed, and love of money, raised taxes to the point where some people struggled to make ends meet. He charged people a tax of 60% of everything produced on land owned within his demesne, but he was not the worst. Some lords taxed their subjects at 80%, leading to many fleeing and suffering under the yoke of their rule and the territory's prosperity dropping significantly over a few short years as people struggled to survive.

This meant that because Leon's dojo made money on the land that Leon bought, the duke would tax all revenue and profit it made.

According to the laws of Nathia, lords with a landed territory or fief can set this tax rate freely; however, if a rebellion gets out of control, the king can intervene and forcibly lower the tax rate if it is too high for a set period. In addition, if the rebellion threatened the integrity of the kingdom, it would not be uncommon for people to be stripped of some of their lands and titles, sometimes in their entirety.

Benevolent Lords tax less, while more corrupt ones tax more. Tax can also be used for political manoeuvring. Apart from promising rewards, if a king or ruler wanted their vassal to support them in a war, they could offer them a few years of tax exemptions to get them to join a war with their troops if they were reluctant to. 

'Damn, these taxes are extortionate! No wonder the bastard Duke of Detarnor is known for his tyrannical ways!'

Railius complained as he read the financial report for Leon's Dojo as most of the money made went to the duke to pay for his army and luxurious lifestyle.

It was worse for businesses, as they had far more expenses than Leon's dojo did. It would not be surprising if many businesses and people moved to a different territory. After all, most of them were freemen, not peasants or serfs who were tied to the land.

Most imperial Chinese dynasties had a relatively low land tax rate, and one of 60% was almost unheard of, as few dynasties that existed for an extended period had taxes higher than 30%.

The only good thing was that because the tax was on land and what it produced, like in Imperial China, people's wages for working for a lord or employer were not affected. However, Duke Ridorfin, unwilling to let any source of revenue be exempt from tax, instituted a 20% tax on the incomes of employees who worked for others and held no land themselves to cultivate.

Of course, slaves were exempt as they were property and not paid at all.

Most people in Nathia were Peasants, not serfs or slaves. Peasants could move around freely, while serfs and slaves could not. Serfs and slaves were tied to their lord or master and unable to move freely without their permission. The serfs had a few rights and the slaves none, and so if saddled with a poor master or lord, these serfs and slaves were well and truly screwed.

There was a clear distinction between peasants and serfs, and unlike in a traditional Feudal System, where there was very little class mobility, there was a fair bit in Nathia, with commoners able to rise high if they were talented enough.

Mercenary groups were different and not taxed. One reason was because, unlike a peasant, a mercenary group had far more military power and could not be bullied as easily, just like the powerful lords and vassals under a liege lord. There was also a chance that a lord may need them in the future, so they tended to find themselves treated well and not taxed on their income as they travelled and spent a lot of money as they went helping to invigorate a lord's economy. Why would a lord tax mercenaries when you can tax your subjects who won't take hundreds if not thousands of soldiers to suppress?

House Aurellion makes a good amount of gold a month, an amount that would have most players drooling with envy. However, they tend to spend it as soon as they get it, as whether it is supplies to learn reading and writing, food and support for the deceased Pelican Guard families, support for the Pelican Guards protecting Railius, or the many investments House Aurellion makes. Baron Malwin often found himself needing to make gold out of thin air as things like buildings were not cheap, requiring several thousand of gold to buy. As with all businesses and enterprises, people only saw their benefits and revenue, not the significant expenditures and risks that come with them.

It was just good that most of the Pelican Guards were already paid wages and did not need to be supported, or there really would not be enough money to go around. They even had to take out 25,000 gold over the last few months just to equip the 500 new mercenaries who joined Sigismond Security Service, and many of them only started to become active recently, needing to go through extensive training even though many were experienced warriors to get them up to the high standards.

This was in addition to any cost needed to train and buy any slaves that seemed suitable as the abhorrent practice, while declining in Nathia, was still present.

No matter what, right now, what House Aurellion needed most was stability and peaceful expansion as Railius sighed and slept, ready for the trials and training of the next day.