Law has no effect on taxation, other than allowing me to go to higher tax levels without suffering loyalty effects.

Province represents population in the rulebook, but as has already been noted, you simply can't rule provinces up if this is the case.

So, if you are to rule up your administration of a province, and get more taxing power, you have a choice, either make the law holding the key to taxation (in which case, does Guilder Kalien tax the people of Caerwil or does Suris Enlien?)
-OR-
You need to seperate administration from the province rating, so you can rule something up.

Now you can decide its easier just to abolish the rule action for provinces.

And you can ignore the fact that by ruling up provinces you are creating people faster than Genosian cloners.

Since I want to allow people to rule their realms up, and I want to seperate population from province levels, and I don't want to make Law holdings a super holding, I prefer Administrative holdings to represent the royal power to tax. It also reflects what gets taxed, because as the province grows, new kinds of wealth appear. An empty province has a few hundred men and herds of animals. The earliest taxation is some portion of the herd delivered to the big-man every quarter. Then farms appear, and crops are taxed. If the tax system did not adapt, then when towns grew, they would be untaxed, and as banking houses and great merchants grew up, they would be untaxed. Perhaps even mines would go untaxed. Ships entering harbors, trade goods crossing into the country, these things would have no tariff. But all the herds and crops would still be taxed. So increasing the Administrative level not only intensifies the taxing, but makes it more extensive too.