My idea:
As is, the realm can only tax the "duchy treasury," which is fed by "duchy taxes."
I suggest, instead, that the realm can only tax the "city treasury" which is fed by "city taxes."
The "duchy treasury" still exists, and is a personal income for the duke alone.
What use does it have? Simple: the city tax can rake in gold for the realm. But that will weaken dukes. Dukes can respond with duchy taxes, which are currently underused. As the duchy treasury would be untaxed, it is essentially a levy by the duke on rural lords, as it currently is, but would have a stronger motive, as the reward for realms to deploy taxes on cities would be greater, due to the taxes actually being effective.
That already exists. I don't know the numbers, but there is a Royal Court overhead that ramps up as you take in more taxes, with nothing up to some percentage (10% of the realm gold, I think).
It does exist. And it is pitifully ineffective. Despite Riombara having 25-35% of it's total tax income (including property tax and other taxes) going to the realm on the whole, realm tax overhead still only amounted to between 0.2% and 0.3% of total tax revenues. It was practically a rounding error, even though sometimes a third of the gold in Riombara is realm-distributed.
I would have expected the penalty to be at least 3-5% at that point. But maybe that's just me.
