OSR: Death, Taxes, and Death Taxes

Are you taxing your PCs?

Most GMs don't. It would be unfair to take away their hard-earned gold for no benefit. But if you're running a semi-medieval game taxes are as important as swords and castles. They're possibly more important. If you want to build a living, breathing, and tone-consistent world, you need to include taxes, and you need to make them gamable content. Don't think of taxes as penalties. Think of them as story hook generators and the mortar binding your setting together.

People also keep asking "how do I introduce domain-level play to my games?" The answer is, "at level 1, via taxes." If you want to read more about the design goals behind this post, check this out when you're done.

Taxes

First, read this excellent book review of James C Scott's "Seeing Like A State". Patrick Stuart also wrote an excellent review so clearly it's got some applications in this hobby. Patrick's analysis focuses on applying the book's lessons to the OSR scene, while Scott Alexander's (much longer) review, particularly Section II, is more useful for running an OSR game. The entire book is, of course, invaluable.

Anyway, how hard can it be to tax peasants?

Very, very hard. See section II for the a hilarious overview of basic taxation in the medieval era. You can try other taxes: windows, salt, beards, every single sales transaction, movement, births, and deaths. It might not help.

Medieval rents and taxes are sticky. They are part of the ancient agreement between a lord and his vassal. As a lord, you can't just say "everyone owes me more grain now". That would break your agreement. The peasants would revolt or flee. It wasn't just a contract. Was, from a folklore point of view, holy law. The agreement also held between kings and lords - it's why parliament exist, in essence. To raise taxes you have to be subtle about it. Take a share of the flour milled at your mill. Institute special taxes for the ransom of kings. Adulterate the currency.

Besides paying the hearth tax and clerical tithe and aids for the lord’s ransom and knighting of his son and marriage of his daughter, the peasant owed fees for everything he used: for grinding his grain in the lord’s mill, baking his bread in the lord’s oven, pressing apples in the lord’s cider press, settlement of disputes in the lord’s court. At death he owed the heriot, or forfeit of his best possession to the lord. 

-A Distant Mirror, Tuchman, Chapter 10. 

Why do you need to raise taxes? First, inflation, which was misunderstood and often aggravated by poor fiscal policy (and plagues). Second, warfare is expensive, and only gets more expensive as armies become more organized and professional. When it was just you and your friends turning up, taxes went to buying swords, weapons, and horses. Now you need to hire mercenaries, pay for baggage trains, and pay the debts from previous wars. As a member of the Second Estate, you also want to live well. You need to organize banquets, build churches, buy silk, books, hats, garters, horses, and gems, maintain castles, maintain your court, and offer gifts to other nobles. You live in astonishing luxury and you fight wars whenever you can. In theory, your vassals pay you to protect them. In practice, you rarely succeed, or are a worse scourge than any enemy. Your object is conspicuous consumption, not the accumulation of wealth.

The First Estate
I'm going to skim this section because I'll cover it in my Estates post. The clergy doesn't pay taxes to anyone in the Second Estate, but they pass tithes up the hierarchy. Peasants are expected to donate 10% of their income, in kind or in coin, to the church. To raise money (for all the same reasons as the nobility), the sale of indulgences and other services became common. Baptism fees, funeral fees, death fees; all collected, all sent up the chain. The local priest was rarely better off than the peasants he served, save that he was spared some manual labour. Above him, the hierarchy increased in magnificence, step by step.

The Second Estate
While the nobility is tax exempt, they are still bound by feudal obligation to their lord to offer military service. At first, this meant turning up with a small army, but it increasingly became a cash obligation. What use are a few untrained farmer when gold buys you properly outfitted soldiers? The Second Estate also paid tithes, donatives, and other offerings to the First Estate.

The Third Estate
The peasants, merchants, and laborers pay for everything.

Castle Trakai, Vilius Petrauskas

Applying This To Your Games

Finally! Ignoring regular, low-level income, how are the PCs taxed on treasure and other substantial gains?

If a PC is from the First Estate:

E.g. Clerics, priests, monks, anyone who wears robes and participates in semi-organized religion. Determine who they answer to in the hierarchy. They owe that person 80% of their income. That's right. 80%. Plus fees. You can spend your share fixing the local church roof or buying bread for orphans or hiring mercenaries.

"That's unreasonable!", you cry. "My poor cleric has to pay all his hard-stolen gold to some NPC I've never heard of?"

Yes. Correct. You can of course lie. You can bury the money in a pit and spend it carefully. You can send less than 80% up the chain. But the moment your superior gets a whiff of cash they'll be onto you and you'll never escape. You could also try and use your new-found wealth to get a better position in the hierarchy.  If you don't answer to anyone in the First Estate, you're either at the top of the chain (unlikely) or you're an ex-priest, and a member of the Third Estate (at best). Even a wandering priest, of no fixed village and of no concern, still answers to a bishop in theory. Someone had to ordain your PC. Someone educated them. You can't break free of feudalism without becoming an outlaw, and if you're an outlaw, you're not in the First Estate.

If a PC is from the Second Estate:

E.g. Knights, nobles, courtiers, ennobled wizards
First, determine their lord, their current obligations, and their status. This should be done at character creation. You can't play a knight without having a lord.
Second, determine if any special obligations apply: ransoms, wars, plagues, expeditions, loans. A good starting point is 2gp a month in peacetime, 20gp a month during times of disaster.
Third, a noble pays their own upkeep.

"That's it?" you ask. "How come he gets to keep almost all of his money?"

First, feudalism. Second, upkeep. A knight's costs are fixed. Can't pay? Lose your status, possibly forever. Third, a member of the Second Estate is (effectively) the only person who can buy certain weapons, armor, services, and land. Fourth, from time to time, they will need to buy special gifts for their lord, pay instead of serving in the military (check your game's rates for mercenaries, then figure out how many troops the knight was supposed to supply), bribes, and donations.

If a PC is from the Third Estate:

Everyone else, including wizards (in my system)
Determine your lord. For wizards, it's the person who sponsored their education, or an ennobled senior wizard, or the King directly. For fighters and peasant-derived classes, it's the lord of their birthplace or the person they swore fealty to. They owe their lord 100%. The church takes another 10%.

"Wait a second," you say, incredulous. "That's not how percentages work. Also that's ridiculous!"

Is it though? Is tomb robbing a recognized and organized profession? Is adventuring? Not even slightly.

That tomb is on somebody's land. Never mind that it might be in trackless wilderness beyond the edge of civilization. Some noble has a claim to it. You are, in effect, stealing their stuff. Second, while you're off tomb-robbing, your regular profession isn't being done. This might not be an issue if you are a soldier, but if you were a farmer, a glassblower, a tanner, a baker, or a scribe, you abandoned your duty. You owe your lord. If you are lucky, he'll accept an apology and a bribe. Third, you have money and no rights. Your lord has rights and no money. He also has a local monopoly on ass-kicking. Guess which way the money is going to flow. (And no, you do actually have rights, we'll cover them in the Estates post. But effectively, for RPG purposes, you're screwed.)

If the PC is an Outlaw:

E.g. Elves, Animist Wizards, and assorted brigands, scum, mercenaries, and looters.
You pay no taxes but you have no rights.

How Do We Get Rich?

The short answer is "You don't." The system does not work in your favour unless you are high in the hierarchy.

The long answer is "You don't, unless you have a plan." PCs should always have a plan.

If you want to operate within the feudal structure, your group needs a noble patron. This could be your group's knight. It could be an ennobled wizard. It could be a local baron who is desperate for cash. You need to get on their good side. They will protect you. They are the lever that makes the entire system turn.

Somebody has claim to that dungeon.
If it's an allied lord, any treasure retrieved belongs to them. You are stealing from their larder. Luckily, money laundering is fairly easy. You can tell people you found the treasure on land you own. If you are a poor knight with a small farm, nobody will believe you. It has to be a plausible lie. You can tell them you won it in the war, but there needs to be a war, a reason for you to be involved, and your lord has to know about it. Nobody audits your receipts. Generous donations to churches and higher nobles silence most questions. Some people might be tempted to kill the golden goose, but you can probably baffle, deflect, or confuse them. This only works if you have a noble patron. If you don't, there's no plausible reason a member of the Third Estate could have treasure. You are stealing from somebody's larder. Wealthy merchants and money-lenders might be exempt fro direct suspicion.

If it's an enemy lord, you can freely loot the dungeon, provided the war is ongoing. It's no different from looting their towns or villages. Since looting is a noble weekend pastime, provide you have a noble patron's blessing, you are free to do what you like. The end result is the same.

Finders Fee
Your noble patron gets all your loot. He then redistributes the loot to you and your friends, as per your agreement (if you feel you can enforce one. It might be better to rely on his generosity). Maybe it's a nice equitable share (if he's a PC). Maybe it's hideously unfair. That's your "100%" tax rate for being in the Third Estate. You pay 100%, then you get some back. From what you get back, you pay 10% to the Church (or 80%, if you are in the First Estate and don't effectively outrank your noble patron).

Death Taxes
If you die, even if you die in the dungeon, you theoretically owe your lord a heriot or a death fee. You also need to pay the priest for your funeral (or to hold a service for the benefit of your soul, if you were devoured messily). If you died without having recently attended church, and you don't have a proper funeral, you have a 10% chance of rising as a vengeful spirit and a 90% chance of going to Hell. Better hope your friends are willing to part with some of your loot.

Example of Play:

Albrecht is a Cleric (First Estate). He answers to the Bishop of Six Falls.
Louis is a Knight (Second Estate). His is the vassal of Baron Summerland. Louis holds the grant of a very small farm.
Honorius is a Wizard (Third Estate). He is also the vassal of Baron Summerland because his family grew up on the Baron's land.
Gwendolyn is a Thief (Outlaw). She answers to nobody.

Standard Method (core D&D): 
The group hears rumours of a dungeon in the wilderness. They march off, loot it, and return to town with 100gp each. They spend the loot on potatoes, coffee, books, and plate armor. Everything is fine.

Feudal Method (Bad End): 
The group hears rumours of a dungeon in the wilderness. Louis asks around and finds that the area is owned by Baron Greenfield, who is an ally of Baron Summerland, but whose seat of power is far from the dungeon. The players safely loot the dungeon and return to town with 100gp each. They spend the loot on meat, horses, and donations. Baron Summerland hears that his vassals have far too much money during peacetime. He shows up with a bunch of knights and interrogates them. While Louis and Albrecht are spared torture, Honorius is beaten nearly to death (below the waist, because he's a wizard), and Gwendolyn is hung from the nearest tree. The Baron finds out about the dungeon and the looting. Fearing war with Baron Greenfield, he revokes Louis' grant and title, and sends him with an armed escort to Baron Greenfield's seat of power to be tried and executed as a commoner. Honorius is kept as a battlefield mage and never trusted again. Albrecht is dispatched to the Bishop of Six Falls who severely chastises the poor priest and threatens to defrock him.

Feudal Method (Good End):
The group hears rumours of a dungeon in the wilderness. Louis asks around and finds that the area is owned by Baron Greenfield, who is an ally of Baron Summerland, but whose seat of power is far from the dungeon. Louis goes to his lord and, after a suitable gift and meal, says (in private). "I know of buried treasure, long forgotten, in these hills. If I retrieve if, I will present it to you as a gift, because you are a lovely man with lovely mustaches." Baron Summerland is flattered but not stupid. He knows the deal. "Go find this buried treasure," he says. He thinks to himself, "My accounts and holdings are vast. A few boxes of gold wouldn't raise anyone's suspicions. And Louis is a good vassal."

Louis asks slyly, "I have but two other requests, and they are quite minor. Can your wizard, the one who calms the waters at your mill, accompany me? It spring and the mill is idle. I also know of a priest of great learning who, through no fault of his own, lacks a church and a flock." He knows Baron Summerland has no love for this water-wizard, and he knows that many churches in the Baron's fief are vacant.

"I agree to both conditions," the Baron says, sensibly. It costs him nothing. He writes a letter to the Bishop of Six Falls telling him that Albrecht will be the village priest of Mud Hill, and sends a small gift. The bishop's secretary reads the letter, pockets most of the gift, and files the letter away.

The party loots the dungeon and retrieves 380gp (Gwendolyn hides 10gp in her boot, while Honorius, who has never seen so much money, hides 10gp in his hat). They return to Baron Summerland and present him with 380gp. He takes 300gp for himself, gives 75gp to Louis, and 5gp to Honorius. Both men are his vassals and both need to be rewarded. If he kept all the money for himself, they would resent him. If he is too liberal, they will grow haughty and ambitious. He made no promises to Albrecht and he doesn't know or care who Gwendolyn is. His part of the deal done, he thanks the party and asks them to leave.

Louis then distributes, as per a previous agreement, the 75gp among the party. He's a very fair and equitable friend - he could have easily kept it all for himself. Such generosity is uncommon. In the end, they all end up with 20gp.

Albrecht sends 16gp (80%) to his Bishop. He has 4gp at the end of the adventure, but he also has a position at a village church.

Louis keeps his 20gp, but spends 12gp (Noble 1) on his upkeep, plus 2gp to ransom the King from the terrible Arch-Potentate of Rahm, leaving him with 6gp. He was a good vassal, and the adventure greatly enriched his lord. Baron Summerland will look on him favourably.

Honorius keeps his 20gp, plus the 10gp he hid in his hat. He donates 2gp to the Church. Guilt torments him nightly, but he is able to improve his tiny cottage and buy a real bed and a good supply of candles. The Baron thinks well of him. He may be invited to the Baron's court to deal with magical matters, and could potentially work his way up to become the Court Magician, with a stable income and fewer cold nights.

Gwendolyn keeps her 20gp, plus the 10gp she hid in her boot. She donates nothing to the Church. She still lives as an outlaw, surviving as best she can on the road and in the wilderness. If she is caught with the money on her, she will probably be robbed or hung as a thief, and she will have no recourse to a noble protector unless Louis wants to get involved.

Long Term Effects
What if the dungeon has much more than 100gp? The first haul is 1,000gp, with plenty more to come, the PCs expect. Baron Summerland is delighted. Since the dungeon is on his ally's land, he can't send a huge delegation to plunder it. The PCs are plausibly deniable and much more profitable. Their income isn't enormous, but it does allow the Baron to provide rich gifts to Count Obereiner, his lord. The Count is also the lord of Baron Greenfield, and Baron Greenfield is very old and has no sons. If he dies, his barony reverts to the Count. Baron Summerland wants the Count to give it to him, but the Count isn't foolish. The Baron's gifts were nice, but not that nice. To pacify him and ensure there is no rebellion he plans to grant a few fiefs to Baron Summerland but keep the majority for himself.

To keep Louis loyal but too busy to rebel, Baron Summerland grants (in perpetuity) a manor farm on the border between his lands and Baron Greenfield's. Louis spends most of his looted money maintaining the manor, fortifying it, dealing with peasant squabbles, etc. He is now a Noble (4) and pays 48gp a month to maintain his status. His income now comes from his vassals and not from adventuring. It is unlikely the Baron will promote him further, but it's possible that Count Obereiner, seeking to weaken Baron Summerland's power, might grant Louis land directly.

Albrecht's generous donations to both Baron Summerland and the Bishop of Six Falls have made him popular and respected, but he is also kind to the peasants in his care. He holds several benefices, including one that keeps him close to Louis. He might be promoted to Bishop one day.

Honorius, as a wizard, has fewer prospects for promotion, but correspondingly fewer expenses. The Baron gifts (for Honorius' lifetime only) him a small tower, which the wizard turns into a proper lair. This brings great prestige to the Baron's court, but it's treated like owning an orchard or a beautiful stream. The wizard is ornamental but happy.

Gwendolyn is given a position in Louis' household. This makes her Louis' vassal and restricts her freedom, but it allows her to retire in safety and spend her money on permanent fixtures and luxuries.

Expulsion of the Money-Changers from the Temple, Giotto Scrovegni

Side Note: Debasing the Currency

The crown grasped for money by every means and favored the least scrupulous, which was debasing the coinage. Less directly obvious than aids and subsidies, it required no summoning of the Estates for consent. Coins called in were re-minted with a lower proportion of gold or silver and re-circulated at the old face value, with the difference being retained by the Treasury. Since the petty coins of daily use were those affected, the system reduced the real wages and purchasing power of the common people while bankers, merchants, and nobles, whose movable wealth was in large gold coins or gold and silver vessels and plate, were less affected. [...] In 1351, the first year of Jean’s reign, the currency suffered eighteen alterations, and seventy in the course of the next decade.

-A Distant Mirror, Tuchman, Chapter 9. I'm going to cite this book so often you might as well read the whole thing.

Those "gold pieces" your players hauled out of a dungeon might be worth up to 10x as much as their face value. They could also be worth 10x less, if the precious metal content of older coins was lower, and the currency has since been reformed.