The Fist earns income, aside from the contract, from its share of the taxes collected at the harbor, Basilisk Gate, and the Wyrm’s Rockdraw bridges.
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Even though the dukes tax the Outer City and nominally rule the area, they rarely exert control over it.
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Baldurians have done very well hosteling, resupplying, and taxing such travelers and traders.
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Although the issue of taxation was put to rest for awhile, the dukes came to see its necessity, especially when raids on the growing Heapside community necessitated the construction of additional protective walls. Thereafter, residents stopped referring to the two districts as “Old Town” and “Heapside” and instead adopted the monikers “Upper City” and “Lower City.” By then sailors had taken news of the city’s struggle to other lands, and the city became known to most of Faerûn as “Baldur’s Gate.”
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He used a portion of the taxes the dukes collected to pay the mercenaries. The establishment of the Flaming Fist gave Baldur’s Gate considerable standing as a military power on the Sword Coast, expanded the city’s tax revenue, and brought badly needed law and order to the Lower City.
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Only the Citadel Gate houses no tax or toll collectors, because its use is restricted to the Watch. The gate toll is a trivial amount for anyone of even modest means—a few coppers at most—but it does curtail the comings and goings of beggars and the very poor. Merchants who pass through a gate pay taxes on the goods they bring to market. All these fees are low individually, but so much commerce moves through Baldur’s Gate that transit fees fund much of the city’s needs.
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Public vehemence against taxation at [Baldur's Gate] sparked the popular revolution that led to the installation of the first dukes centuries ago. Yet now the gate is a collection point for taxes that help fund the city government, because the original Council of Four instituted taxation at the gate soon after the rebellion. The irony of this situation is not lost on the citizens, but it provokes little bitterness; as the saying goes, “The insult to history is history.”
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"the ubiquitous tax and toll collectors."
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- Murder in Baldur's Gate (5e)
