As regards tax rate, it's been said that the best rate is 50%. This gives a nice solid 25% of population limit an hour and is maintainable. Since I have a lot of spare gold, though, I'm running at 20% tax which gives me a lot of people spare to work the fields and be trained as soliders.
I need an army since the wars are going on seriously now, so I expect much of the next week will be spent training one up.