So the merchant both got reduced by 1 gold per turn - and is only buildable at city level 2. Because.. you don't want us to build armies? I mean on the one hand you've got your undefended city sitting out in the middle of nowhere and lacking the gold to maintain units to protect it. And on the other you are recommending we build armies to assist our soveriegns in killing neutral baddies.

Anyone notice the AI dying off frequently for no reason... almost like they have no defenders... odd isn't it?

Now I presume the reason for doing this is to limit the ability of the player to drop tax rates to zero for the purposes of boosting production with no drawback. There are a few suggestions I have to help alleviate this (and fix the economy)

1. All cities produce a base ammount of 5 gold at 'normal' tax rate, 2 at low and zero at none. This ammount could require a merchant, or could be seperated from the city screen (and thus not affected by bonuses to gilder production), -or- it could be a base ammount of the empire, completely independant of cities.

2. Gildar Values of equipment and weaponry are drastically reduced. By 1/10 - 1/5 of it's current ammount. It silly from both ends that I can sell a cloak for 240 gildar (an ammount that could  take a hundred turns at the current tech level) and that it costs over 600 to fully equip my champion in leather armor that can be produced in 5 turns on regular units.

3. Upgrading units costs get adjusted to some percentage of the new values as listed above, per unit in the group, or simply require construction efforts in the city they are stationed

4. Provide free support to 'x' number of units per empire, constructed city, or tech advances. This ammount should initially be 2

5. Taxes on cities are recieved at a diminishing value as the empire expands. Let's call it a corruption mechanic (it doesn't have to be realistic). You could do this by increasing unrest with additional cities, or by simply making the gold produced from the empire not function at the full ammount after a certain population. Indeed this might open the option of using smaller empires versus larger ones as high unrest may not make expanding worthwhile. Fyi prisons probably shouldn't give -10% to the empire.. that ammount is seriously broken.

6. Regular units can acquire equipment, and other monetary worth items, that get sent to an inventory in your capital to sell/use.

These suggestions are neither mutually exclusive or required of each other. Am I wrong here? Seems like armies are stupidly hard to maintain when they matter (at the beginning) and frivolous when your stack of doom can already crush everything in sight.