The Tax Man Cometh
If your players don’t hate you yet, try this!

Taxes. Yes, players tend to hate them. But they can be useful to a campaign, when used appropriately (adding realism to the world, rather than as a punishment for the player characters).

Attitudes toward taxation in fantasy RPGs has changed over the decades, from being encouraged (and discussed in detail) in first edition AD&D, mentioned briefly in second edition, greatly simplified in third edition and Pathfinder, to being ignored altogether in fourth and fifth edition D&D. Apparently today’s mighty heroes aren’t to be troubled with such trivialities. Or are they?

The types of taxes that characters might encounter may vary depending on whether the campaign is centered around a home base, or of a more itinerant nature. Enforcement of tax collection may also vary according to a number of factors, including the economy, magic prevalence, the alignment and power of regional rulers and their forces, and the comparable power of player characters.

Types of tax and related fees:

Taxes are collected from residents and citizens, based on property and income. Suggested amount: 5% to 20% of holdings annually (or quarterly). Additional taxes may be sprung suddenly upon the populace to fund a military campaign, a dragon’s demand, or similar large-scale emergency. If the player characters are not residents but are merely passing through the area, this should not affect them.

Tithes are traditionally 10% of a resident’s income, given to the dominant local religious organization. As most campaign worlds tend to be polytheistic, characters may be able to choose which temple they wish to tithe to, unless one has a particularly strong grip on a region. Obviously, not all characters may be religious, or may follow opposing gods to the dominant local deities, so this may be a source of conflict.
Temples may simply deny services to anyone who does not contribute, or if they are of sympathetic alignment, they may just add a surcharge to their normal costs. Enforcement will vary widely according to the god, from “fine, you’re not invited to our bacchanalia” to “your flesh is now forfeit, so the ritual butchers are here from our hellicatessen to apply a spicy seasoning to your skin.”

Tariffs are fees imposed on imported goods, perhaps 1% of the value for mundane, and 2% for exotic items. These will be highly situational, depending on the local economy or relationship with the source region. They can be used to discourage trade with a rival or enemy state, or simply to obtain taxes from wealthy non-residents at the city gate, such as small groups of itinerant spelunkers laden with arcane artifacts and lolling-tongued monster trophies.

Excise taxes are levied pre-sale on specific goods and services produced domestically, perhaps because they are considered dangerous for consumption but the opportunity for revenue is just too tempting.
Examples might include fortified fae wine, hallucinogenic gnomish pipe tobacco, and various explosive alchemical concoctions. (This is unlikely to feature in a campaign unless a party relies a little too much on flinging flammable objects around, or a character decides to focus more on a merchant life than an adventuring one.)

Tolls are levied on travelers for the use of roads, bridges, ferries, canals, tunnels, magic portals, and similar methods of passage. It may only cost a couple of copper coins per traveller to maintain a simple road or bridge, but the obviously the fee will be greater if magic or mercenary patrols are required to safeguard a route. Choices may be as simple as “pay a toll to take this tunnel or be torn apart by pteranodons” to the more ambivalent “don’t stray from the safety of the road or dryads will do you a naughtiness.”

Dues are a payment for membership of a guild or similar organization. Cost may vary depending on the perks granted. Basic fees may be required for official recognition and eligibility to be considered for mercenary contracts or bounty hunting, and higher payments may grant access to more elite, prestigious organizations with superior resources such as libraries, scented soap and special snacks for exotic animal companions.

Weregeld, or blood money, is the value placed on someone’s life, and the monetary compensation paid by their killer to the bereaved kin or clan. Not to be confused with lycanthropic coinage, the payment is made to avoid a blood feud with the slain person’s family, and also to avoid other, ever-so-slightly harsher punishment, such as being beheaded. Weregeld might perhaps vary from a paltry 200 coins for a peasant to 20,000 gold for a noble of royal lineage. This may only be applicable in certain societies which have frequent skirmishes between rival clans, or if notable lords are killed in battle rather than ransomed.

Scutage, or shield money, is a fee to avoid military service. This will usually be applicable only to knights or lords who are granted land by their ruler in return for the promise of military support when called upon. Semi-acceptable circumstances for paying scutage may include being busy dealing with local insurgents, a spelunking expedition, or engaging in a diplomatic mission with the dryads.

Currency conversion may not necessarily be a tax, but it can be a notable drain on the resources of certain types of travelers who like to liberate gold from foreign lands and long-lost civilizations. Many kingdoms will vastly prefer to trade only in their local currency, especially if the monarch has an attractive profile. Conversion costs may be 5% to 10% for uglier illegal tender.

In conclusion, taxes and fees can be used to encourage player characters to certain areas and behaviors, and discourage them from others. It can be used to spotlight alignment divides between law and chaos, and can greatly aid in immersion if taxes are implemented in a well-reasoned rather than arbitrary fashion, encouraging players to consider connections within the campaign world. It also gives more meaning to certain professions, such as smugglers and fences. Rulers may waive monetary payments in exchange for services, giving additional opportunities for quests.

Players’ reactions to the imposition of taxation will vary, depending on the perceived fairness. Some may recognize that taxes may provide their characters with safe havens to rest and trade, while it may provoke such extreme reactions in others that their characters undergo swift alignment plunges into chaotic evil, suddenly engaging in reckless and murderous acts to avoid parting with a single hard-earned coin. This may change with time, however, as characters potentially improve their social status, gaining lands of their own and thus eventually collecting taxes from their own vassals.