Ah, that makes sense.
As I think about it, actually, option a of tax-free reserves still seems really bad, though. It still makes a huge handicap on building big temples, which are already comparatively rare, despite, in Terran's case, practically an entire realm with multiple cities chipping in to finance them. Taxes will make this even harder.
Except that increasing the size of a temple is a one-time expense, and you don't need to have it sitting in the region. The tax-free reserve is for handling maintenance, while raising temple levels still requires some coordination to pull off (as it should).
That's not to say that your other point isn't valid, as it may well be. I don't have the background to figure out what the other unintended side-effects would be, but expanding temples isn't a problem from where I'm standing, only maintenance.
