How do I change the tax rate for my city?
To change the tax rate of your city, click on your Castle. This will bring up the City overview screen. On this screen, click on the 'Change Tax Rate' button. You will then be prompted to enter the desired tax rate for your city. Click Submit and your city will now have the entered tax rate.
Higher tax rates will decrease city morale, lowering your cities population and reducing the number of idle population. If you set the tax rate too high, enough people will leave your city that there are more jobs than there are people. When this occurs your city will suffer reduced resource generation as there are not enough people to gather them.
Lowering your tax rate or building more residences will encourage people to return to your city and will help reverse the issue. A little tinkering is required to find the right balance between your cities tax rate and idle population.