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Yang Yan's Two-Tax Reform (Liangshui fa) in Tang China

780 CE·Economy & trade·China (Tang Empire)·
780 CEDate
Economy & tradeCategory
19Empires active
Date
780 CE
Category
Economy & trade
Region
China (Tang Empire)
Era
Post-Classical / Medieval
Significance

In 780 CE, Chancellor Yang Yan persuaded Emperor Dezong of Tang to adopt the Two-Tax System (liangshui fa), a sweeping fiscal reform enacted to rebuild state finances shattered by the An Lushan Rebellion.

It abolished the older zu-yong-diao head-tax regime, which had assumed the now-defunct equal-field system of uniform landholding, and replaced a patchwork of miscellaneous levies and corvee obligations with two consolidated taxes: a land tax paid in grain according to acreage and a household tax assessed in cash (or textiles) according to graded wealth. The two taxes were collected twice yearly, in summer and autumn, and shifted the fiscal basis from counting people to measuring property, acknowledging real disparities in wealth and landholding. Revenue rose dramatically, with collections in 780 reportedly exceeding the previous year's total income from all sources, and the reform curtailed the eunuchs' control of palace revenues. The system endured as the foundation of Chinese taxation for roughly seven and a half centuries, until it was gradually superseded by the Single Whip reform of the sixteenth century.

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