Kubla Krauss's (often cut) villain song "There's the Rub" sounds random and a tad racist (in a funny way). But it's actually highlighting the fact that he doesn't understand what it means to be in a position of leadership. He thinks being a Pharaoh just means having pyramids around you, being a Raja just requires elephants, and being a shogun just means having samurai followers. This not only explains why he's such a bad ruler, but also hints at the bigger picture of how his being so self-centered prevents him from understanding the important things in life.
Kubla Krauss is Jack Frost's perfect foil. Both are powerful (Kubla with his worldly power and wealth, Jack with his winter magic), but both are Lonely at the Top (and both even sing songs about their loneliness – "It's Lonely Being One of a Kind" and "There's the Rub"), and both fall for Elisa. But Kubla cruelly and selfishly kidnaps Elisa and tries to force her to marry him, and after she's rescued, plans to invade and destroy her home village to get her back. This contrasts sharply with the selflessness of Jack, who patiently waits for Elisa to fall in love with him while being her friend, sacrifices several months of his limited time to be human (which he could have spent wooing her) to use his magic to stop Kubla, and though sad when she marries Sir Raveneau, is ultimately happy that she's happy.
If Kubla Krauss keeps taking the money from the Villagers, why doesn't he take the Ice Money? It clearly has some value to the peasants, and while it wouldn't have any real value outside of his City-State, it does have value there, and I see no reason why he wouldn't tax the Peasants out of that money too.
One gets the implication that the villagers keep the Ice Money secret from him, perhaps the one thing they are successfully able to.
That and/or Kubla Krauss saw no value in ice, due to the heat in his castle would've melt the ice, and thought they were just playing make believe.
