Judge of the Song Dynasty

Setting up a charitable organization to deposit land into it, then avoiding taxes.

This sounded like some kind of fraud! If it were that simple, would they even need him?

Chen Maiqian and Ma Tianhao both stared blankly at Zhang Fei.

As if to say, do you think we’re pigs?

Zhang Fei patiently explained: “Once this land is donated, it no longer belongs to either of you.”

Oh! This wasn’t fraud, this was robbery!

Chen and Ma’s expressions remained unchanged, still staring blankly at Zhang Fei.

Do you think we’re pigs?

Zhang Fei felt somewhat guilty under their stares and forced himself to remain calm: “But this isn’t a one-time deal where everything is disposed of at once, but rather a steady stream. Every year you’d need to donate some money, and you’d need to manage these lands and hire people to handle them. This requires paying wages, and you two could arrange for your sons and grandsons to manage it.”

“I thought this was some brilliant scheme.” Ma Tianhao snorted: “This is just moving money from the left hand to the right hand. Would the court allow us to do this?”

Zhang Fei said: “Why would the court oppose you doing charity?”

Ma Tianhao said: “What kind of charity is this?”

“This is real charity.”

Zhang Fei said: “First, as I just mentioned, once this land is donated, it no longer belongs to you. No one can arbitrarily move the funds held by the organization.

Second, we will publicly disclose all accounts – how much land we possess, how much money we donate each year, and to whom we donate it. If this isn’t charity, what is?”

Chen Maiqian frowned and asked: “You mean we can’t freely use the money in it either?”

Zhang Fei shook his head: “Of course not.”

Chen Maiqian kept shaking his head: “Then we’d rather pay taxes.”

They had thought it was fake donation, but listening further, this was real donation.

Ma Tianhao was also very dissatisfied, muttering: “We spend several hundred strings each year and get this kind of advice. What a terrible deal!”

Several hundred strings was a lot? Damn! Zhang Fei chuckled twice: “Everything has advantages and disadvantages. You can’t expect to monopolize all the benefits – those officials aren’t complete incompetents either.”

Chen Maiqian said: “But your scheme offers us no benefits.”

Zhang Fei said: “There are three benefits. First, it can avoid the current tax collection system. The so-called transport charges, waste charges, and conversion charges would all be ineffective against this. This way, I could better use legal means to protect your assets.”

The two listened with furrowed brows, showing hesitant expressions.

Everyone disliked paying taxes – this was human nature.

But legally speaking, most people risked not paying taxes because the damn court wasn’t decent either, with all sorts of miscellaneous charges. The tax rate might nominally be a certain amount, but in reality more than that would definitely be collected, and there was no fixed standard.

Was it double, or several times more?

Nobody knew for sure.

The unknown was the most frightening.

Anyway, there was one principle: the imperial court could never lose.

Take transport charges alone – making people deliver tax grain to places a hundred miles away, and they might have to pay tolls crossing bridges. Who could bear this?

It was manageable during good harvests, but once the court went to war or encountered problems, these miscellaneous taxes would visibly increase.

Not just commoners, even landlords were afraid.

Therefore, current tax collection was a battle of wits between both sides.

In this situation, there was little room for legal intervention, because both sides were breaking the law.

The previous lawsuit illustrated this problem – both sides shifted blame to each other. If the opponent hadn’t falsified accounts, they wouldn’t have lost so badly. At most they would have had to pay back taxes on the land under unsealed contracts, and fines would have been unlikely.

To receive legal protection, the first requirement was legality. But the problem was that the court’s system itself had issues that couldn’t be resolved quickly. They had to first avoid this system.

Zhang Fei continued: “Although the money donated each year wouldn’t be less than paying taxes, and might even be more – otherwise the court would have no reason to agree – everyone would know what they were dealing with and wouldn’t act recklessly.

Second, the initiative would be in your hands. Whether to build irrigation works, donate to the poor, or donate to schools – all of this would be feasible. Some good deeds could indirectly benefit your businesses.

Third, there was the matter of profits. As I mentioned before, you could arrange for your descendants to manage affairs within the organization and receive compensation from it. At the same time, to maintain the charity, this money could be used for business ventures and could continuously generate profits.”

Chen Maoqian asked, “Continuously generate profits?”

Zhang Fei said, “The amount of money the organization directly donates to charitable causes each year would be fixed. How should the remaining money it holds be handled? It could be used for business.”

Ma Tianhao asked, “Could it be used for lending?”

Zhang Fei blinked and said, “Assuming legal transactions, of course it could be. Usury would definitely not be allowed, because the accounts would have to be made public.”

Upon hearing this, Ma Tianhao immediately lost interest.

Chen Maoqian said, “Could it be used to buy and sell houses?”

Zhang Fei said, “Of course it could.”

Chen Maoqian said, “Then the profits from buying and selling houses…”

Zhang Fei said, “Would all belong to the charitable organization.”

“…?”

The two men were speechless for a moment.

After all this, this money had nothing to do with them!

Zhang Fei said, “Gentlemen, the more it earns, the higher wage it can afford to pay its employees. Of course, it can’t be too outrageous, and the amount directly donated would certainly increase as well. But there’s also an advantage to this – in the future, it would be very difficult for your descendants to squander everything away.”

Ma Tianhao nodded repeatedly, “That is indeed an advantage.”

Chen Maoqian couldn’t help but glance at Ma Tianhao, and the image of Ma Xiaoyi’s foolish appearance flashed through his mind, making him understand this point.

Zhang Fei continued, “Besides this, there’s another advantage – you could consolidate the land of several wealthy merchants together. The wealth would be considerable. You’re both businessmen and should know that the more wealth you have, the more money you can make. I happen to have a good business opportunity here.”

“What business?”

Chen and Ma asked in unison.

Zhang Fei said, “Printing.”

“…!”

The two men immediately lost all interest.

One of them was a moneylender, the other sold houses.

You’re talking to them about printing.

It would be strange if they had any interest.

Zhang Fei clicked his tongue, “Gentlemen, don’t be like this. In the short term, it definitely can’t compare to your businesses, but in the long term, it would absolutely make more money than your businesses.”

“Really?”

Ma Tianhao looked disdainful, “How many books would you have to sell to match the interest on my interest money?”

Zhang Fei snorted, “My books can be sold all the way to Jiangnan. Can you sell your houses in the capital to Jiangnan? Besides, I’m not saying you should sell books.”

Chen Maoqian asked, “Then what are you having us do?”

Zhang Fei said, “Sell printing blocks.”

“Printing blocks?”

“Right.”

Zhang Fei nodded, “You both know that currently printing blocks and printing are integrated, but I plan to separate the two – publishers would purchase printing blocks for printing.”

“What’s the point?” Ma Tianhao looked puzzled.

Zhang Fei said, “Have you gentlemen heard of movable type printing?”

Both men nodded.

Zhang Fei said, “Movable type printing uses individual movable characters. We now have mature technology, so I plan to open a workshop specifically to produce these movable characters and sell them character by character.”

His initial plan had been to use printing to break the literati’s monopoly on public opinion, but now the situation had changed, because the emperor was preparing to enter the field personally, which opened up many more possibilities. The source of this content ɪs novel-fire.net

But the expenses on that side would be frightening, and he couldn’t bear them alone. Fighting lawsuits wasn’t easy either, so he thought he’d throw out the manufacture of printing blocks and just handle the publishing himself, which would be much easier.

Ma Tianhao shook his head directly, “Whether it’s movable type or woodblock printing, how much money could this make?”

Zhang Fei really wanted to beat this fellow to death. That said, there really were few businesses in this world that could compare to moneylending. “Just printing books and articles naturally wouldn’t make much money, but if you print newspapers, these movable characters wouldn’t lack buyers. Newspapers are published daily – woodblocks simply can’t keep up.”

“Newspapers?”

Ma Tianhao said, “But those are under imperial court control.”

Zhang Fei said, “I have my own methods for that. Before long, newspapers will flourish. All the money I’m making now, I’m throwing into that. If it weren’t profitable, why would I bother with all this?”

Chen Maoqian said, “If it’s profitable, we could cooperate with you now. There’s no need to set up some charity.”

“Of course.”

Zhang Fei nodded, “What I mean is, if you happen to be setting up this charitable organization anyway, why not use the charitable organization to cooperate with me? That way, we could coordinate with each other. If you’re unwilling, you could also cooperate with me directly.”

Chen Maoqian and Ma Tianhao still appeared quite hesitant.

Even if the political risks could be negated, the cost was not insignificant either.

People in this era treasured land like their lives!

To donate it away, well…

Just then, Li Si suddenly walked in. “Brother San, Academician Sima has arrived.”

Upon hearing this, Chen Maoqian and Ma Tianhao immediately stood up to take their leave.

Regarding this charitable organization, they still needed to give it serious consideration.

Zhang Fei naturally would not force them.

“This humble commoner pays respects to Academician Sima.”

Having just arrived at the front courtyard, they saw Sima Guang approaching, and the two men Chen and Ma hurriedly performed a bow.

“Mm.”

Sima Guang nodded.

Zhang Fei said, “Academician Sima, please come inside.”

Upon entering the hall, the old man Sima Guang seemed rather embarrassed. “I hope I haven’t disturbed you.”

To visit without warning was considered ungentlemanly in these times.

Among scholar-officials, they would normally send a visiting card first.

Zhang Fei smiled. “Not at all! They just came to consult me about some matters.”

Sima Guang stroked his beard. “About tax evasion, I presume?”

Zhang Fei replied sheepishly, “About making up back taxes.”

Sima Guang laughed heartily. “So what advice did you give them?”

Ah ha! I had been planning to visit and persuade him, but now he’s delivered himself to my door—why not gladly accept? Zhang Fei’s mind sparked with an idea, and he said with an “oh”: “Preserving wealth amongst the people.”

“Preserving wealth amongst the people?”

Sima Guang was stunned. “You told those two merchants about preserving wealth amongst the people?”

Zhang Fei nodded.

Sima Guang was very curious. “Could you explain this to broaden this old fool’s horizons?”

“Academician Sima is too modest.”

Zhang Fei chuckled, then continued, “Actually, it’s not that they don’t want to pay those taxes, but as Academician Sima knows, there’s no fixed amount for these taxes—sometimes they’re high, sometimes… extremely high.”

Sima Guang remained silent.

Zhang Fei said, “Their main concern is this uncertainty. After all, these wealthy merchants have no relatives in the imperial court and lack a sense of security. So I suggested they donate all their land for charity to avoid this problem.”

Sima Guang listened in confusion. “Use charity to avoid taxes?”

This sounded like throwing the baby out with the bath water.

Zhang Fei nodded, then explained the charitable organization concept in detail.

Sima Guang listened with flashing eyes. “This charity of yours is somewhat similar to Xiang-guo Temple, except yours is more regulated—you must publish accounts and specify annual donation amounts. But if you do this, what about the imperial court’s revenue?”

Zhang Fei smiled. “I believe that even if I don’t do this, the imperial court still won’t be able to collect this money.”

Sima Guang said, “Your lawsuit has frightened them so badly, who would dare evade taxes now?”

“If only I had such ability, that would be wonderful.” Zhang Fei chuckled, then added, “They might not dare this year, but next year is uncertain. After all, this situation isn’t caused by one factor alone—there are many contributing aspects.”

Sima Guang nodded slightly. “You’re much cleverer than Wang Anshi. He just never can understand this problem.”

Zhang Fei quickly said, “How could Academician Wang not understand? He understands all too well, which is why he tries so hard to change things. When there are problems, one can’t just ignore them.”

Sima Guang said, “Since you have such faith that he can reform, then why bother with this charity? If Wang Anshi can make everyone pay taxes legally and let the court collect taxes legally, then their worries would naturally be unfounded.”

Zhang Fei just smiled foolishly.

With so many tax-exempt households and so many privileged classes, with the system as it was, Zhang Fei didn’t believe Wang Anshi could achieve this. As long as one loophole remained unplugged, that loophole would gradually grow larger.

He had already advised the emperor to start with commercial taxes and leave land taxes alone for now.

Sima Guang continued, “Actually, your idea isn’t bad. As long as they’re truly willing to contribute money to charitable causes, it could provide excellent support to the government. When I served as a local official in the past, I encountered floods. When it came to disaster relief, the costs between government relief and local gentry relief differed by more than ten times.”

Given the Song Dynasty’s system, the costs incurred when a government decree was fully implemented was simply astronomical.

Sima Guang’s insistence on preserving wealth amongst the people wasn’t mere armchair theorizing—he was making judgments based on his own experience. When the government allocated funds, how much would remain by the time they reached the local level? When local gentry contributed the same amount of money, it could achieve ten times the effect.

Treating them favorably in normal times in exchange for their support was cost-effective when the calculations are done.

But problems also existed. Moral local gentry could indeed provide great help, while immoral gentry would make things extremely terrible, even becoming sources of disaster. This case also reflected this problem.

Sima Guang was naturally aware of this point as well.

Zhang Fei’s charity organization seemed capable of solving the problems within this system. The previous policy of preserving wealth amongst the people had no legal constraints and relied entirely on conscience, while this charity had legal constraints.

“Did they agree?” Sima Guang asked again.

Zhang Fei said, “They said they still need to consider it.”

Sima Guang asked again, “Do you think they’ll agree?”

Zhang Fei shook his head. “I don’t know.”

Sima Guang didn’t really think they would agree, so he said, “If they do agree, come find me to discuss it again.”

Even if you don’t say so, I’ll still go find you. For this matter, if I approach Wang Anshi, he’ll kill me. When the time comes, I’ll still need you to fight with Wang Anshi. Zhang Fei nodded casually, “Alright.” He then asked, “What brings Academician Sima to my humble residence?”

He couldn’t reveal that he had already calculated that this would happen.

Sima Guang said, “Regarding the matter of tenant contracts, His Majesty has already assigned this to the Court of Penal Review. I wanted to come ask what your views are on this.”

Zhang Fei said, “This is simple—land taxes should follow the land.”

Sima Guang said, “I know this too, but I’m very worried that problems will arise during implementation.”

He could keep watch over this small area of Bianjing, but what about outside Bianjing?

He was very concerned that those landlords would take the opportunity to dismiss tenant farmers to create trouble for the government. Therefore, he didn’t plan to only stipulate that land taxes follow the land—he also wanted to stipulate that they couldn’t dismiss tenant farmers on this pretext.

How to legislate this was very worth deliberating.

The Song Dynasty placed great importance on legislation. You had to explain clearly what the basis was for establishing this legal rule, under what circumstances it applied, and under what circumstances it didn’t apply.

This required comprehensive consideration.

Sima Guang was especially famous for his meticulous and careful work. If the emperor hadn’t pressured him to implement everything within half a year, he probably wouldn’t have been so eager to come find Zhang Fei to discuss it.

“This isn’t my—!”

Zhang Fei had wanted to say this wasn’t his area of expertise, but suddenly had a thought and said, “Currently, judicial reform is still in preparation, and what you can control is also limited. If you want to avoid problems during implementation, there’s only one strategy.”

Sima Guang hurriedly asked, “What strategy?”

“Publicity.”

Zhang Fei said, “As long as the publicity is adequate, it can compensate for deficiencies in administrative governance.”