Enweil was reduced to Iato. I could run max tax, and we had a good tax efficiency. Then we took about four or five rural regions. Iato didn't have any knights anymore, tax efficiency was atrocious all-around, and Iato couldn't hold tax levels anywhere near what it used to have without maintenance issues. We became considerably poorer.
Tax rates in neighboring regions seem to have more effect than the other factors. Ideally you should have your capitol highest and then distance to the capitol gets 1% lower the further you go out.