# The Hobbit: KoM Optimal Tax Guide

**The Hobbit: KoM Optimal Tax Guide** by PeteinSQ

This game operates on some very simple maths in terms of population and tax returns.

The number of houses you have and their level determines your Population Limit and the Happiness rate equals what percentage of your Population Limit will be filled. For example if your Population Limit was 10,000 and your Happiness rate was 75% you will have a Population of 7,500.

So what determines your Happiness rate? It is 100% minus your tax rate, so in the above example the tax rate would have been 25%.

The optimum tax rate therefore is 50%. If you had a Population Limit of 10,000 and a tax rate of 50% you would have a Happiness rate of 50%, and a population of 5000 which would generate 2,500 gold in one hour. Whereas if you had a tax rate of 25% you would have a population of 7500 which would only generate 1875 in gold.

Once you push the tax rate above 50% the tax take actually starts to fall as your population starts to fall below 50% of your Population Limit.

I thinks get a bit more complicated when you’ve got a large army though.

**Additional Info** by Draggin

If you set rate to 0, population climbs to 100% of pop. limit. blissfully happy!

Upping tax rate to 100% yield equals pop. limit falling to 0 at some rate but not fast. Averages to .5 yield, but then you have to do the reverse, which drops average to the same as the suggested optimal above, .25 for 50% rate.

Pop limit = 10,000, rate = 0, yield= 0

Change rate = 100 yield = 10,000 falling to 0, averaging 5,000,

I did this to raise gold fast and have little accumulating while away from the game. Less incentive for others to attack me.

A few caution. Rate should always be enough to cover Hero salaries, usually 1%.

And do not let happiness/population fall below the number of workers you need, (pop – idle)/limit %.

Large population increases upkeep cost, which is subtracted from food raised.

how do you change the tax rate?