it's illegal because the rules say so.
Even if it weren't how would you envision it working? The plan is so full of fail... let me give you some examples and reasons.
- For a period of time, there is no free trade in the market, so you can't impose a tax of resources because the player has no way of paying it.
- Some people don't buy or use PP, so asking for that as a tax doesn't always work. Also, depending on if/how you get your PP, (I personally just buy it), it may be non transferable for a period of time up to 30 days.
- And, most importantly, if you can't make good on your threat, i.e. "pay up or I'll cat you to next week", then your threat is hollow and no one will ever pay. You've already pointed out that you lack the offensive power to dominate your area.