The rules for the sale of magic items appear to be somewhat abstract with a building producing an item and then the ruler selling it even though it does not appear to belong to the ruler. Below is a variant that incorporates the creation of magic items.
Income
As leaders of the kingdom the leaders should be afforded a lifestyle befitting their status. The leaders of a barony should be granted a cost of living (pg 405 core) of wealthy for the level of a Barony and extravagant for Duchy and Kingdom.
Further to this a stipend should be paid to each leader of 10gp per relevant leader ability bonus point at the level of Barony, 20pg per point at the Level of Duchy and 50gp per point at the level of Kingdom. This is to reflect the duties performed on behalf of the Kingdom.
Magic item creation rules
A leader may build magic items as per item creation rules. Time spend administering the kingdom only allows for the same amount of input into the creation of magic items as adventuring does ie 2 hours per day.
Certain buildings in the kingdom give bonuses to the spellcraft check to create a magic item this represents resources and expertise present in the particular buildings. The maximum bonus possible is +5 regardless of how many buildings are present. A building gives a bonus dependant upon what items it produces a building producing minor items gives +1, Medium items +2 and major items +3 each building only gives one bonus. For example a shrine and an academy would give a +4 bonus and if a temple was added the bonus would only go to +5.
You may use treasury funds to pay the cost of the creation of a magic item only if it benefits the kingdom the item if used for personal use will attract the same penalty to unrest and loyalty check that a withdrawal of funds (step 2) would using the items cost in BP to determine the DC of the loyalty check. What benefits the kingdom is a discretion left to the GM.
A magic item can be sold either as part of step 3 of the economy phase or at shops in the city the maximum price per item sold is the base value of the city. To determine the price of sale a base of 70% of the items listed price is obtainable, due to the leader’s position in the city. An increase in price can be made by a successful diplomacy check DC 10 with every point above 10 giving an extra percent with a maximum of 95% at DC 35.
Current Rules for Income phase
Step 3—Sell Valuable Items: You can attempt to sell items that cost more than 4,000 gp through your city’s markets to bolster your kingdom’s Treasury; these can be items you recover during an adventure or they can be magic items currently held by any of your cities. To sell these items, make an Economy check (DC 20 for minor items, DC 35 for moderate items, and DC 50 for major items). A failed check indicates the item doesn’t sell. Success indicates that the item sells and you can increase your kingdom’s treasury by 2 BP (for minor items), 8 BP (for moderate items), or 15 BP (for major items). You can make one Economy check per city district during each Income phase.
An approximate DC modifier for sale of an item would be 20 + cost(item)/2000gp
A revision of Step 3
Sell Valuable Items: You can attempt to sell items that cost more than 4,000 gp through your city’s markets to bolster your kingdom’s Treasury; these can be items you recover during an adventure or they can be magic or mundane items made by any leader. To sell these items, make an Economy check (DC 20 + item price(gp)/2000). A failed check indicates the item doesn’t sell. Success indicates that the item sells and you can increase your kingdom’s treasury by the items price/4000 in BPs. You can make one Economy check per city district during each Income phase.
A limiting factor in the change to the income produced is the time it takes to create a magic item. With a maximum of 26 day to create an item ( a month minus the 6 hours per day of the “ruling” week) and the increase in productivity given by taking a +5 DC penalty to create an item an item worth 13BP is able to be created this is in actuality only 6.5BP as the initial cost of 6.5 BP must be paid. A difference of 8.5 BP is created and this will only increase as there are 11 leadership positions (some of which may not create items) and potentially more cities and districts.
To alleviate the economic differences in the alternative model the surplus BP generated by Farms and Open Spaces should be added to the treasury.
The other flow on effect is magic items created by buildings:
Originally Last paragraph of building a city (pg 58 Rivers Run Red)
After it is generated, a magic item remains on the market until it is purchased. Alternatively, once per Income phase, a kingdom can make Economy checks to try to sell items; once the item is sold, its slot remains empty until the next Upkeep phase (see page 61).
This should be amended to:
After it is generated, a magic item remains on the market until it is purchased. Once per Income phase one item per city or district may be removed from the market, its slot remains empty until the next Upkeep phase (see page 61).
I possibly should have read the entire kingdom building sticky thread and it would have explained the economy a bit. oh well. I still think the income and magic item creation are not too bad. Feel free to disregard the revision of income step three.