So here's an exploit with the way population happiness works and an idea I have how to fix it.
Currently you can lower your taxes so that your population's happiness goes up to 100% . Then you just up your taxes to normal and the happiness stays at 100% indefinitely, unless you increase taxes again.
Here's 2 ways I think this system can be improved:
First suggestion is to do with the exploit: Making it so that even at the default tax rate, happiness decreases over time BUT only if the happiness state is above 'content' level. This makes it so that you can't just up your happiness and then tax away the usual amount forever while getting better work output.
The second suggestion is to do with the strategy of taxing, that being the constant increase and decrease in tax in order to get the most out of both your economy and work force. This would mean lowering the tax to reach 100% happiness and then maxing it out again until the happiness gets back to 'content' in order to get a boost of gold income. With this strategy in mind perhaps the benefits of taxation should be nerfed, or the disadvantages increased as this is an easy way to get a lot of gold in the early game. If later in game populations reach several hundreds, then maxing your tax collection even for just a few turns could give you a ridiculous income boost (I assume. I haven't gotten that far yet). But if increasing tax has really big disadvantages like faster morale drop or possibility of random revolt even if happiness is still above content then that might balance things out.
I'm sure that this is way overthought and there's a lot of other more important things that need to be worked on first but when you get to the point where you have enough ready to start thinking about balancing then I hope this might be useful!