This section of the rules deals with the detail of Planetary Government, and as such is essential reading for all those Houses interested in running candidates for office as Senators for the planets within the galaxy.
The mechanisms involved in determining planetary budgets and taxation levels are fairly complex, and unless planning to get involved in politics, new players may wish to skip this section of the rules until they are more familiar with the basic workings of the game. The one essential fact of life is that you will pay taxes on your profits, since without this, the planets concerned would descend into disorder and economic ruin. In essence, that's all you need to know from this section at first.
Each planet will have a budget that may be set by the governing senator in order to best distribute the tax income for the planet to the areas where it is needed. The main areas of budgetary allocation are Law and Order and Infrastructure. A small allocation also goes to the Emperor as Imperial Taxes for use in Galactic peacekeeping and combating piracy and crime at the galactic rather than planetary level.
Planetary budgets are set by specifying a percentage split of the tax income across the relevant areas. The screen to maintain budgets is available to the governing Senator's House as a link from the 'Government View' for a planet. The default setting for any planetary budget is to have 40% allocated to Law and Order, 40% to Infrastructure, and 20% to Imperial Taxes. Given a steady flow of tax income, a budget set to this level should allow a planet to maintain relatively low crime levels, maintain a healthy economy and avoid civil disorder. If no other settings exist for a planet, these defaults will always be used.
There is a fourth potential area for allocation of a percentage of the budget - 'personal profit'. Any budget allocated to this area goes straight to the coffers of the House controlling the governing senator. This represents the potential for corruption that always accompanies those in positions of power. Of course, in order to take any personal profit, the percentages allocated to the other areas must be reduced, with possible knock-on effects on crime levels and the economy. In addition, the Imperial House is able to order an investigation into any senator, should there be a suspicion of embezzlement taking place. This might happen if the Emperor notices particularly low Imperial Tax payments from a certain planet. Should such an investigation uncover evidence of foul play, the offending senator can be removed from office in disgrace, with according loss of status for the controlling House.
There is one final variable that may be adjusted for a planetary budget - a personal contribution. This is really the reverse of taking personal profit, and represents the governing House making an additional daily financial contribution to the well-being of the planet. This is added to any tax take when calculating the effects on crime and economic health. Any such contribution is split 50-50 between Law and Order and Infrastructure spending. The effectiveness of a personal contribution depends upon the relative size of the contribution compared to the standard daily tax take there. If you contribute $100 a day, but the planet is earning $5000 a day in taxes, your contribution will have little effect. However, if the same planet has a take take of only $500 a day, the contribution would have a much greater beneficial effect.
Budget settings may only be changed once every 10 game days - reflecting the time taken to adjust the financial infrastructure to accomodate any changes. Additionally, the budget may not be changed during an election campaign.
The budget settings for a planet remain private and may be viewed and changed only by the governing House. However, the information can also be accessed by a successful Covert Ops Political Intelligence Report mission. Unless you have an agent in the Political area of the target, such a mission is unlikely to succeed.
Important! The budgetary system is driven by the premise that 20% of all taxable income is received as tax from the Houses operating on the planet. This is a crucial point to bear in mind when setting tax rates (see below). At very low income levels, the impact of an insufficient tax take is reduced to prevent unrealistic crime levels in a newly created galaxy or newly discovered planet - and also to prevent a trough in budget allocations at the beginning of each month before much income has been earnt. However, once the income earnt on a planet reaches normal levels, it is essential tax rates and thresholds are set so that 20% of this income is paid as tax. Otherwise, budgets will be stretched and the standard 40% allocation to Law and Order and Infrastructure will not be enough. Governors should use the detailed taxation analysis screen available from the Budget or Tax Rates screens in order to view a breakdown of incoming taxes.
The effects of allocating too little of the budget to Law and Order or Infrastructure can be very serious. As you might expect, low spending on Law and Order will result in rising crime levels. This will increase the maintenance costs of all facilities on the planet and may even result in civil disorder if crime reaches very high levels. If this happens, the governing senator may be attacked or the facilities of the governing House (and possibly other Houses) may be damaged in rioting. If these situations start to occur, a second term of office begins to look very unlikely.
With regard to Infrastructure spending, a low spend can cause the economy to stagnate and increases the chance of a recession, which will reduce the wealth of the planet by one level. In addition, the popularity of the governing House will suffer, represented by a steady loss of influence on the planet over time, as the populace take issue with the negligent policies of the governor.
Of course, the reverse of both the above situations is possible if the tax take and/or budgetary allocations are high enough. Crime levels can be reduced, the economy taken to new heights and the influence of the governing House increased.
Most planets in the Galaxy will be under Imperial Jurisdiction - that is, illegal actions there will grant feud score to the Emperor against the offending House, and attacking another House without the requisite feud score will result in Renegade status for the aggressor.
A governing senator may, for whatever reason, withdraw a planet from Imperial Jurisdiction. This will grant feud score against the Governing House to the Emperor, but no budgetary contribution to Imperial Taxes would be expected. Taxes must still be paid to the Governor by those operating on that planet, of course!
A link to allow this withdrawal from Imperial Jurisdiction is accessible from the 'Government View' on the Planet Information Panel. Such an action is not recommended unless you know exactly what you are doing, and have a mandate to do so from the other Houses operating on that planet! The governor of any such planet will immediately forfeit their Senate seat and can no longer propose, second or vote on Senate motions.
All profits earnt on a particular planet are eligible to be taxed by the Governing Senator in order to fund spending on Law and Order, Infrastructure and Imperial Taxes. Without taxes to allocate to these areas, a planet would descend into anarchy.
Profits are calculated on a straightforward 'income minus maintenance cost' basis. Only facility running costs (not infrastructure costs) are counted for determining profit. Profits are divided up by sphere, with the total profit for a sphere on a planet giving a potential taxable income figure for each House.
It is the responsibility of the Governing Senator to set tax rates appropriate for each planet. As a rule, 20% of all taxable income should be paid as tax, although how this 20% is arrived at is up to the Governor. All tax thresholds and rates are on a sphere basis, so one sphere could be taxed heavily, and another not at all.
Tax rates for each sphere on a planet can be viewed (and set, if you are the Governing House) via a link from the Planet Information Panel 'Government View' screen. There will always be at least a default 'All Spheres' rate. As a standard, this is set to a base threshold of $1000 and base rate of 10% for each sphere. Therefore a House would need to make a monthly profit of $1000 in a given sphere on that planet before paying any taxes there.
Of course, the Governing Senator may well decide this threshold is too high and reduce it. The base threshold can even be reduced to zero, so that all profits on a planet are taxed. Sphere-specific rates can also be added, and will override any 'All Spheres' rate if present for the relevant sphere.
Detailed taxation analysis views are available from the Treasury so that a House may see where and how much tax is being paid. The Governing Senator may also access a detailed view for each planet from the Tax Rates screen, in order to determine which spheres are earning the most or least taxes and adjust rates accordingly.
Certain trade commodities can be ruled illegal by a Governing Senator. Trade in such commodities carries a risk of discovery by the Imperial Police, resulting in warnings and increased feud score for the Emperor as outlined in the section on the Mercantile sphere.
Trade in three commodities in particular - narcotics, slaves and arms - is normally outlawed. This is because these commodities will often lead to an increase in crime levels on planets where they are traded.
A Governing Senator may choose to legalise or outlaw any commodity. There is a link from the Planet 'Government View' screen which can be used to access a screen detailing which commodities are currently illegal on a given planet, and which the Governing Senator can use to add or remove illegal commodities.
The Governing Senator of a planet may choose to grant a monopoly on activity in a certain sphere to a given House. This may be as part of a reciprocal agreement, as payment for services rendered, or simply to corner the market for the Governor's own House. If such a monopoly is in place, any House which then constructs a facility or sets up a trade or transport route in violation of the monopoly will find feud score is granted to the holder of the monopoly and the Governing House on the planet.
Any monopolies currently in force on a planet can be seen from the Planet Government View, 'Monopolies' link. From this screen, the Planet Governor can also add new or revoke existing monopolies. A monopoly can be for an entire sphere, or just for one commodity or transport class.
Each monopoly granted has a negative effect on planetary well-being through the stifling of competition. Infrastructure investments from the planetary budget are reduced in effectiveness - by 2% for each commodity or by 5% if a monopoly is granted on all activity within a sphere. Thus, a governor who sets up a lot of monopolies will lose influence on a planet and possibly be fuelling economic recession. As such, monopolies should be granted with caution.
It is possible for the Governing Senator of a planet to exempt any House from paying taxes on that planet - either for a single sphere, or for all spheres. The Governor can even exempt his or her own House, if desired.
Any Houses currently exempt from taxes can be seen via the Planet Government View, 'Tax Exemptions' link. From this screen, the Governing House will be able to add new exemptions and rescind existing ones.
The obvious implication of exempting Houses from taxes is that the amount available to the planetary budget will be reduced. This may lead to increased crime, a poorer economy, and questions from the Emperor if too little is raised from the planet in Imperial Taxes.
as seen in the Rulebook
Generally speaking, adding a personal contribution to the planetary budget doesn't have much effect and is basically a waste of money better used for other things.
There are several budget settings used for various purposes: