Royal Taxes in Anno 1800 can seem intimidating, but they are a predictable part of the game’s economy. This guide explains how they work, how they impact your balance, and why they shouldn’t be a major concern.

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How Royal Taxes Work

1. Population-Based Taxation:
   • Royal taxes are applied once a single island’s population surpasses 1,000 people.
   • If you have 999 farmers on an island, there are no taxes. If you have 1,000 farmers, taxes begin at 9%.
2. Incremental Increase:
   • Every additional 125 people increases the tax rate by 1%.
   • This continues until you reach 4,875 people on one island, at which point the tax rate is capped at 40%.
   • No matter how high the population grows beyond 4,875, the tax rate remains at 40%.
3. Different Tiers, Different Taxes:
   • Each workforce tier (Farmers, Workers, Artisans, Engineers, Investors) has its own tax rate applied.
   • Example: If you have 1,200 workers and 1,500 artisans, they will both be taxed separately at their corresponding rates.

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Breaking Down the Tax Calculation

If you open your Balance Menu (top left corner), you’ll see a breakdown of your income and expenses:

• Population Income: The amount generated by your residents.
• Expenses: Maintenance costs, ship upkeep, and other deductions.
• Royal Taxes: The amount deducted due to the taxation system.

Example Calculation:

If you have 5,000 artisans on an island:

• Your tax rate for them will be 40% (because they exceed 4,875 population).
• If their total generated income is 10,000 coins per minute, then 4,000 coins (40%) will be deducted as royal tax.
• You still keep 6,000 coins per minute from them after taxes.

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Debunking Royal Taxes as a Problem

Many players worry that Royal Taxes will bankrupt them. However, taxes are never the actual reason for financial trouble. The real cause of negative balance is often poor economic management, such as:

• Overproducing goods without selling excess for profit.
• Not expanding population fast enough to compensate for maintenance costs.
• Failing to engage in active/passive trade to boost income beyond taxes.

At the 40% cap, you still keep 60% of your income, which is more than enough to cover maintenance and expand production.

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Tips to Mitigate Royal Taxes

1. Increase Population to Cover Expenses
   • If royal taxes are cutting into your income, focus on expanding your total population to generate more tax-paying residents.
2. Sell Excess Goods for Extra Income
   • Use Docklands DLC or trade routes to export excess goods like soap (to Eli Bleakworth), cannons (to Isabel Sarmento), or pocket watches (to Katima).
3. Passive & Active Trade
   • Passive trade: AI ships buy goods from your trading posts.
   • Active trade: Manually sell high-value goods to AI traders like Archie and Kahina.
4. Avoid Unnecessary Overproduction
   • Keeping production in balance is key. Overproducing goods without a purpose leads to unnecessary maintenance costs.
5. Ignore Min-Max Strategies that Limit Growth
   • Some players try to keep all population tiers below 999 per island to avoid royal taxes, but this stifles expansion and economic potential.
   • Instead, focus on scaling your economy to absorb taxes rather than avoiding them.

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Final Thoughts

Royal Taxes are not a game-breaking mechanic. They serve as a balancing factor for population-heavy islands, but they should never cause financial ruin if you manage your economy correctly. If you maintain good trade practices, production efficiency, and steady expansion, your income will always outweigh your taxes.