Determined to give his reign a reliable foundation, both for his personal popularity and for national prosperity, Liu Bang worked to reduce the intrusiveness of government. As historians Ebrey, Walthall, and Palais write:
Emperor Gao did not disband the centralized government created by the Qin, but he did remove its most unpopular features. He set up his capital at Chang’an, not far from the old Qin capital. He eliminated some laws, cut taxes, and otherwise lessened the burdens on the people. After a century of almost constant war and huge labor mobilizations, China was given several decades to recover. Responding to the desire to restore the old order, Emperor Gao gave out large and nearly autonomous fiefs.
Liu Bang introduced a measure of decentralization by creating these fiefs. In some ways vaguely similar to European feudalism, this system allowed for more local, and therefore more flexible, governance.
The Han Dynasty began, around 202 B.C., with tax cuts, deregulation, and decentralization leading to local control. These measures were wildly popular with the Chinese.
Ironically, the Han would eventually be overthrown, around 9 A.D., by a rebel named Wang Mang, because they had lapsed into high tax rates, regulation, and central control.
Wang Mang’s rebellion caused the Han to reform, and they were able to regain the throne in 23 A.D. by reducing taxes. Tax policy is the key to understanding the history of the Han Dynasty.
