Why did the dynasties of old prioritize agriculture and suppress commerce?
There were many reasons: economic factors, social stability, class concepts, and the influence of values. Beyond these, there was another critical reason: taxation. Farmers lived off the land; no matter how the harvest turned out, the land remained where it was. Because the land could not move, the farmers could not move either. The Imperial Court could send officials at any time to collect taxes.
Commerce was different. Merchants traveled across the length and breadth of the country, their whereabouts unpredictable. Furthermore, the limitations of the society at the time made it impossible to tax the production stage, leaving only transport and sales to be taxed. Generally, there were three types of commercial taxes: transit tax, gate tax, and market tax.
Transit tax was levied by local governments at checkpoints on merchant caravans; it can be understood simply as a local tariff. In the Ming Dynasty, these transit taxes were known as "Chao-guan" or banknote passes. In the first year of the Wanli reign, national revenue from these checkpoints was 520,000 taels of silver, an increase of nearly 200,000 taels over the 330,000 taels collected in the twenty-fifth year of Wanli. When Wei Zhongxian was in power, he exempted a massive amount of transit taxes to curry favor with Southern officials and the merchants behind them.
Chapter 546