While I may not be the only writer to do so, I'm certainly one of the very few to present the taxation problem from the viewpoint of a ruler in a fantasy novel. For those interested, the character is Creslin, in The Towers of the Sunset. The entire issue of taxation, both in fantasy worlds and in real worlds, seems to be stereotyped in terms of "taxes are bad for the poor and too low for the rich."

The problem with this viewpoint is that it tends to ignore the entire reason for taxes, which is to raise revenue in order to provide services for the society as a whole that it would be uneconomic or impossible for the majority of individuals to provide for themselves. National defense is often cited as one of those services, perhaps because it's fairly obvious that very few of us could afford to build or buy even one aircraft or tank or ship. Other obvious "communal" services are road-building, water and sewers, ports, harbors, and canals. And some services, once regarded as best provided privately, are now considered public in most industrialized nations, such as education, old-age income security, banking regulation, food and medical oversight and regulation.

The underlying problem with taxation is that people have differing levels of income, but many of the services provided are the same, regardless of income. Each individual generally gets the "same" amount of national defense, roads built, availability to water and sewer or education as any other. And given socio-economic trends, often certain services are used disproportionately by those who have little or no income and pay little or no taxes. Thus, even with a "flat" percentage tax, in essence a certain amount of redistribution of social assets takes place. With a "so-called" progressive income tax system, where those with greater income pay a higher share of taxes, even more income and asset redistribution takes place. And when one adds in programs to aid the poor and disadvantaged, or direct subsidies to businesses, an even greater amount of redistribution occurs.

Now... even in fantasy novels, when taxes or tariffs are discussed, usually they're imposed by the evil ruler, and they're far too high. What's overlooked in fantasy and reality is that taxes are in essence fees for services provided, and the social question becomes who pays how much for what, and who receives what in return for what.

The United States is running a massive deficit, financed these days primarily by the Chinese, simply because we have voted for more services than we are willing to pay for, including funding an unpopular war and income redistribution through Social Security, Medicare, Medicaid, and various welfare programs, not to mention farm and other "corporate" subsidies [not to be confused with tax concessions, which are NOT income redistribution, whether they are justifiable or not]. Oh, every American will say, "I don't mind my taxes going for 'X,' but I don't think we should be spending on 'Y' or 'Z.'"

In The Towers of the Sunset, Creslin is faced with the unenviable problem of needing to raise revenue to build and pay for enough of an armed forces and navy to defend his people against outside attacks. If he taxes too highly, he will destroy his young nation's economy, and if he taxes too little, he won't have a nation left. But, at least, as the head of a ruling council, he didn't have to deal with trying to explain to every citizen why he or she all couldn't have more in services than they wanted to pay for.

—L.E. Modesitt, Jr.:  7/29/2008 10:49:00 AM