The primary way to make money in Anno 1404 is through the taxation of your populace. The goal is to bring in enough tax revenue that you can pay for all your empire's costs such as building maintainence and ships and possibly even have a surplus.
When you first start, your inhabitants will be "poor" peasants but as you provide your inhabitants with better and better goods and services, they will become more and more affluent and therefore be able to pay more taxes. The game is designed in such a fashion that there are breakeven points where you can have a certain amount of inhabitants that can afford a certain amount of production. It's best to create enough goods to totally fulfill your population's needs and have a small surplus to trade.
You lose the game if you go too far into debt and have to go bankrupt.
The five tax levels/moodsEdit
Anno 1404 allows you to set the tax level to five different settings ranging from very low to very high. The tax level is set independantly for each island and each civilization level (Peasant, Citizen, Patrician, Noble, Nomad, and Envoy).
Very Low/Dark Green/EuphoricEdit
This is the farthest left setting and lowest tax. It's the only level that allows houses to upgrade/ascend. A house has to have full occupancy to ascend.
Inhabitants will move in to fill the max capacity of each home but houses will be unable to ascend.
This is the ideal tax rate you should use unless you need houses to ascend or inhabitants move in. No inhabitants will move in at this rate, so if you have the plague, major fires, or other deaths and disasters you should switch to a light green tax level for each civilization level to replace lost population.
This should only be used as an emergency tax rate if you need money very quickly. People will pay a high amount of gold to you, but they'll move out at a steady rate until all the houses are nearly empty, although their houses will not downgrade.
This is the farthest right and highest tax rate at which tenants will move out rapidly. Housing units may also downgrade to the previous, lower civilization level.
Taxation level tipsEdit
- A very low dark green tax rate should only be used during times of rapid growth where you need to upgrade housing and want people to fill the housing as fast as possible.
- A low light green tax rate should be used whenever you want to have people move in but you either have no more ascession rights to grant or don't want to grant them. For example, you could have just advanced many envoys resulting in new ascension rights being granted for citizens. So once you upgrade those citizens to patricians you can use a low light green tax rate to let them move in while not losing too much gold from lack of taxes.
- A normal yellow tax rate should be the level of tax that all populations use that are not growing. It grants you the most tax while not decreasing population.
- A high orange tax should only be used when you are very strapped for money. You will need to resort to a low light green tax rate after a while to replenish the people who left so this is not a permanent solution.
- A very high red tax rate should only be used in extreme cases. It will make people move out very rapidly but does earn large amounts of gold. Possible uses are for getting the most out of condemned islands instead of just bulldozing the housing (perhaps islands you conquer but don't wish to keep).
- Be careful with taxing Peasants and Envoys Very High. If they are enraged for too long, their houses will ultimately reach the status of Desolate, the state in which the house is abandoned and is looking decayed. Once in this state, you can get these inhabitants back quickly (demolish houses and build new ones) or slowly (setting tax rates at Low or Very Low).
Managing your tax levelsEdit
At the very start of the game you can set the tax level for the Peasants to light green since you can't ascend to Citizens for a while. Keep the tax level at light green while building houses so that the homes will fill up.
Any time you expand your city by building new homes, switch the tax rate to light green so people will move into your new homes. A common mistake is to forget to switch the tax rate from yellow, which results in all the new homes only have one person (the default) live in them.
A very essential method for checking when to switch your tax level from light green to yellow is to click on any marketplace and click on the "Inhabitant overview" tab and hover over each civilization class. Only switch to yellow when you've maxed out (or nearly) the total inhabitants for each class.
When you are able to meet all the needs for a civilization class and wish to have the next higher civilization level move in, switch your tax rate to dark green. It will take a few moments for your houses to be ready to ascend. Next it's recommended to manually ascend homes by denying ascension rights and quickly ascending them from the "Population pyramid" screen. Once enough have been ascended, put the tax rate back at yellow for the original civilization class, and set the tax rate for the new civilization level to light green so inhabitants will move in.
It's not recommended to ever use the orange or red tax rates. If you need to do this, it's likely there are other fundamental issues that need to be addressed.
Balance display of income and expensesEditAnno 1404 offers only one consolidated statement of income and expenses. It can be accessed by left-clicking on the current income/deficit button. The first number is the entire tax revenue your empire is generating. The next four numbers correspond to the four types of expenses that Anno 1404 tracks: building costs, ship costs, military costs, and beggars. The final number is what determines if you have a surplus shown in green or a deficit shown in red.
As you build more buildings, ships, and military units and structures your costs will go up and you must increase your tax income or risk going into a deficit. Opening the Balance display is helpful to quickly determine the major cause of financial problems. In the screenshot to the right, you can see the tax revenue is just above the building costs but the -1,070 ship costs push the balance into a deficit.
Enraged inhabitants large income boost phenomenonEdit
A curious phenomenon occurs when an essential need becomes inadequately satisfied. The affected civilization class's mood meter turns entirely red, and rightly so since a crucial need is lacking. Being furious, your people will start to riot and move out. It would make sense that at this point the tax revenue would drop to zero since enraged, rioting, inhabitants aren't likely to continue paying taxes. However, the exact opposite happens and the tax rate is automatically maxed to the very far right of the meter, which can often double or triple your budget surplus or take you from losing money to suddenly making a large sum.
For instance, with 40 full noble houses with every need very well satisfied at a calm tax load of yellow, you make around 8,400 gold. If you disallow all drinks to the Nobles or simply run out of drinks in your warehouse, when the drink need reaches inadequately satisfied around 25% to 30%, the tax rate jumps to the far right and you start making roughly 12,000 gold. This 12,000 will steadily decrease since at a red enraged mood level nobles will move out quickly and downgrade to patricians.
If you resupply whatever good was lacking, the tax rate will return to whatever you had set it too previously. So if you aren't aware of this phenomenon, you can be confused as to why your income can keep fluctuating wildly between a large deficit and large surplus or a small surplus and large surplus.
It could be argued that this game mechanic is broken and unintended. It represents the implausible idea that if the inhabitants are going to be enraged anyway, you might as well massively tax them. As said before, it's unlikely enraged inhabitants would agree to pay any tax, let alone a massive tax as they are moving out. Regardless, this is how the game works and is something to be aware of.
If you ever notice your income wildly fluctuating, this almost certainly means you are low on several necessary goods and your inhabitants keep going between enraged and calm/happy/euphoric. This most often happens when you have an inefficent trade route established that is supplying these goods. So what happens is your people keep running out of a good but then when a trade ship finally arrives they temporarily move from engraded to calm, but quickly return to enraged as they consume the small supply the trade ship delivered.
Also note it's possible to use this phenomenon to your advantage if you are desperate for money and don't mind losing some inhabitants. This is most useful when an AI player is demanding money or they'll go to war and you know you can't win militarily. Just immediately demolish an essential needs building (or deny access to a good, although this doesn't instantly infuriate your people) and watch your income temporarily soar. After doing this, be sure to rebuild or resupply the need and set your tax level to light or dark green so the lost inhabitants will move back in.