Chapter 74: Wartime Tax

To have enough troops, is there any other option besides expanding the army? If you want to expand the army, you will naturally need to have money.

The finances of the Republic of Hungary have been on the verge of bankruptcy since its establishment.

The newly formed government didn't know how to manage money at all, and the tax that it finally collected was spent in confusion before it was warm in their hands.

On this issue, Kossuth bears direct responsibility. It can be said that the new Hungarian Republic has surpassed Austria in corruption.

This question can be referred to the Republic of China government after the Xinhai Revolution.[1] When the old order collapsed and the new order was not established in time, officials in high positions became more unscrupulous after there was no restraint.

"Sir Kossuth, the government has collected war taxes twice this year!" The Marquis of Roche reminded

Hungarian taxation has always been independent from the shadows. When the decadent aristocrats controlled the government, there were often messy taxes, and the lives of the normal people down the ladder become much harder.

Originally thought that after independence, everyone would be able to live a good life, but the reality was the opposite. Without the "exploitation of the Austrians", their life is even more difficult.

The new republican government gave greater rights to the locality. In their view, as long as it was an elected government, it was a clean and honest saint.

Facts are always different from ideals. Now Hungary has learned from Americans that not only the central government has the right to collect taxes, but local governments can also collect taxes[2].

To put it simply, the number of tax-collecting agencies has increased, and there are still no restrictions. Officials have taken the opportunity to make money, and even some community governments have formulated a lot of messy taxes law.

Of course, the aristocrats do not need to pay these taxes, nor do the capitalists. It is the common people who really pay for it.

However, the war tax is an exception. The nobles and capitalists must also pay it together. The problem is that they still collect it so diligently, which makes it difficult for everyone to accept it.

How long was the Hungarian Republic established? Even if the preparation time in the early stage is counted, why is it not less than three months?

In such a short period of time, two war taxes have been levied, and now a third war tax has to be collected. The enemy has yet to strike, we might have already given up everything.

Unlike the nobles, capitalists can find ways to evade taxes. The main industry of the aristocracy is land, which cannot be hidden on the surface, and it is not easy to evade taxes.

"Yes, Your Excellency the Marquis!"

"But the situation is not controlled by others. According to the information we have collected, Austria can now put up to 400,000 troops in the war against us, while the National Guard is less than 300,000. What's more, they are all well-trained regulars, and our army is just workers who have just put down their hammers, or farmers who have lost their hoes, relying only on blood and sweat to make a living. The gap between the two sides are simply too big. Without the same number of troops, we have no chance of winning this war at all!" Kossuth explained.

Well, the situation of the Hungarian National Guard is actually worse than he said, because those troops are not fully well trained and have a strong will to protect the country.

Even if the National Guards are not 300 thousand soldiers. The National Guard is only a grass-roots army, and they are not strict with the jurisdiction and training regment. The last remaining amount of money are not even enough to support so many people.

But it doesn't matter. There are policies above and countermeasures below. In this regard, capitalists are the most experienced. The officers who were born in the bourgeoisie quickly thought of Roche's strategy.

In addition to recruiting some people to support the façade, the rest are exhausted, and if the above inspection is carried out, people will be temporarily drawn in to fill up the number.

Of all the armies in Hungary, the only one with combat effectiveness is actually the student army, they are the real revolutionaries, fighting for national independence. The rest, including Kossuth, are no longer pure revolutionaries.　　

"Sir Kossuth, I think it is necessary for the government to disclose its fiscal expenditures. It has only been so long since the establishment of the republican government, and you have spent a year of the Hungarian government's expenses under normal circumstances! If the republican government has always been so expensive, then maybe you don't need to wait for the Austrians to do it, and you will destroy the new government first!" Duke Leopold warned solemnly

This was a humiliating statement causing Kossuth's face to become gloomy and sour. Everyone knows that the new government has a lot of financial expenses. In the past, he used war as an excuse.

But the war has not yet started, and the cost are already massive now. If the war does not start, what should they do?

International loan? Stop dreaming, no consortium dares to lend them money, which means that there is no repayment of the loan, and Austria is also a member of the great powers, but it will not recognize the treaties signed by these rebel parties.

Other than that, there's only a tax increase. This is not a good solution. It cannot solve internal problems. No amount of money can fill this bottomless pit.

"Yes, the government can disclose fiscal expenditures for everyone to monitor. But now the financial difficulties, we need some money to get through the crisis. This time, the government will not take the money for nothing. We will issue bonds for everyone, with an annual interest of seven cents, and a tentative issuance of 200 million krone. (11.69 grams of silver) If the bonds don't sell, then we'll just have to collect another wartime tax." Kossuth still chose to compromise. Now he still needs the support of these people. If there is no cooperation from the nobles, it is completely nonsense to want to collect taxes. Appropriate concessions for this are also feasible.

Seeing the strong attitude of the noble representatives present, even the war tax was temporarily changed into a war debt by him, and he would rather bear the high interest, and Kossuth was not willing to stimulate everyone's nerves.

The Hungarian Republic has represented the interests of the emerging bourgeoisie since its establishment. A series of decrees favorable to the economic development of the bourgeoisie have been issued just after independence, including the abolition of a series of exorbitant taxes that hinder economic development.

These reform measures have allowed the government to gain the support of the capitalists, and at the same time have greatly increased the financial pressure on the government. After all, the bourgeois economy cannot develop overnight.

The Kossuth's government has no governing experience. Some people suggested that the government issue Hungary's own currency. After tasting the sweetness of issuing currency, the Republican Government started printing money in an attempt to get rid of the financial crisis.

The reality taught Kossuth a hard lesson. He didn't have enough reserves in his hands, and he only relied on the government's reputation to issue currency, which naturally turned into gorgeous waste paper.

After the failure to issue currency, the financial crisis of the Republic of Hungary broke down, and it has since embarked on the road of no return to increase taxes.

[1] 1911 Revolution basically turning Imperial Chinese into Republic of China.