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http://www.eu4wiki.com/Vassal
Basically you need to be a lot bigger than your target (see the table in the wiki) to avoid a negative modifier.
e.g if you have 200 base tax the biggest base tax with no negative economic modifier is 11. At 250 base tax it is 12 . You can see that you need to add a lot to your base tax to make any difference. BTW the math is not linear (i.e it is not always 50 to 1)
Its also doesn't including your Tax and Production income only your, and your vassals, base Tax/Production development in comparison to the Tax/Production development of the nation you want to have as your vassal.
As far as military vassalization, it was strongly skewed when they introduced development level. Because it is non-linear, the old enforcement decisions no longer holds. The Wiki has not been updated and base tax no longer is used for most decisions.
For example, an old 5 base tax OPM had a 25 negative when using decisions that require the square law. Now, the same nation might have only 3 base tax, but it can easily have 3 production and 2 manpower, giving an 8 total development level. Eight squared is 64, which is way more than twice the old method, despite having a lower base tax. Because the player positives for decisions are typically linear, you now have to be WAAAY stronger than before for enforcing many decisions.
The new development levels have also significantly affected many other things, like subject revolt risk, coring costs, and even diplo points costs to enfore war demands.
I am really hoping they roll back some of the excessive costs from the new development level based math when the 1.13 patch is released.
That is true if you forget that the major power also switched to development values. And if they had around 25 base tax before, they can now easily have 25 production too.
However, if both economies are modifier in the same proportions, the fact that the smaller nation's economy is squared will mean that your modifier to vassalize them will be lower anyway, just not by that much.
Also, military development is not taken into account.
One week into 1.12 they lowered diplo-annex from 10 to 8 DIP per development, while keeping coring to 10 ADM per development.
In 1.13 this doesn't change, but the aggressive expension per development point is doubled, so it goes the other way.
That is true only for linear items. However, in the old days, and likely still true today, many items were not linear when comparing might. The smaller nation had things like squares for the denominator while the larger nation had first order values times a fixed constant for the numerator. Using squared larger values due to the change over to development instead of base tax certainly explains why it is much harder now to annex small nations.
Plus, are you certain they do not use development level for pretty much everything? Do you have a text file or code which shows that military levels are not used? Where did you hear this from?
This is VERY bad news. I read on the forum that someone participating in the beta said they were experimenting in using a reduced value for coring, something less than 10D. I sure hope so, for the excessive coring costs is really reducing the ability to expand rapidly like that needed for WC. I would be happy with a doubling of AE if they cut coring costs in half. When you want to expand rapidly, you are pretty much forced to set focus on admin and never change it.
The game is so unbalanced in that you usually have plenty of left over military points but are always short on admin points if you plan on doing any kind of expanding. And many achievements require rapid expansion. Not to mention it is easy to fill 3 military idea groups but costly to fill even 1 admin idea group.
If you are correct, this will surely start me looking for my next game.