In a newly started game I cast Propaganda on my first city.
It had three essence, so I should get three Gildar from Propaganda.
At 40% tax rate I got +2 Gildar (from the village) +3 Gildar (from Propaganda) *40%= 2 Gildar.
At 0% tax rate I got nothing.
This would indicate that Propaganda is taxable. Something which the spell description doesn't mention.