At the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments. ...

When tax assessments and imposts upon the subjects are low, [businesspeople] have the energy and desire to do things. Cultural [economic] enterprises grow and increase, because the low taxes bring satisfaction. When businesses grow, the number of individual imposts and assessments mounts. In consequence, the tax revenue, which is the sum total of (the individual assessments), increases.

Royal authority with its tyranny, and sedentary culture that stimulates sophistication, make their appearance. ... The individual imposts and assessments upon the subjects, agricultural laborers, farmers, and all the other taxpayers, increase. Every individual impost and assessment is greatly increased, in order to obtain a higher tax revenue. ... Gradual increases in the amount of the assessments succeed each other regularly. ... Eventually, the taxes will weigh heavily upon the subjects and overburden them. Heavy taxes become an obligation and tradition, because the increases took place gradually, and no one knows specifically who increased them or levied them. They lie upon the subjects like an obligation and tradition.

... The result is that the interest of the subjects in business activity disappears, since when they compare expenditures and taxes with their income and gain and see the little profit they make, they lose all hope. Therefore, many of them refrain from business activity all cultural activity. The result is that the total tax revenue goes down, as (the number of) the individual assessments goes down. Often, when the decrease is noticed, the amounts of individual imposts are increased. This is considered a means of compensating for the decrease. Finally, individual imposts and assessments reach their limit. It would be of no avail to increase them further. The costs of all cultural enterprise are now too high, the taxes are too heavy, and the profits anticipated fail to materialize. Thus, the total revenue continues to decrease, while the amounts of individual imposts and assessments continue to increase, because it is believed that such an increase will compensate (for the drop in revenue) in the end. Finally, civilization is destroyed, because the incentive for buisness activity is gone. It is the dynasty that suffers from the situation, because it (is the dynasty that) profits from business activity.

If (the reader) understands this, he will realize that the strongest incentive for economic activity is to lower as much as possible the amounts of individual imposts levied upon persons capable of undertaking businesses. In this manner, such persons will be psychologically disposed to undertake them, because they can be confident of making a profit from them.