Looking back over things, it probably would have been better to presume that the costs of buying magic swords for the army would have been part of the outgoing expenditures drawing off of the gross revenue, rather than being something to spend the kingdom's net profits on. However, that wouldn't necessarily change the bottom line all that much, in terms of how feasible it was to buy magic swords for the army.
Doing for the *entire* army, most of whom are relatively unskilled, wouldn't make sense, no. But officers and knights, who in your typical pseudo-Medieval world are of noble rank? These are guys who are in full plate armor, the cost of which is comparable to a +1 sword. These types may not all have such weapons, but they're all going to want a shot at them.
The only presumption I made was that, for commoners, 30 gp per month goes to the costs of living. You can shift the ratio of how much of that are taxes versus the costs of buying things like food, housing, healthcare, and necessity items to any ratio you want.
The d20 SRD lists "meals, poor" as being 1 sp a day. I started from there.
Let's leave aside for a moment the issue of having a standing army at all times versus pressing the citizenry into armed service in times of need; so we'll assume an army of 10,000 and a civilian population of 10,000.
We don't need to posit a standing army. We need to posit that the army, however it is formed, needs to be paid. We can quibble about how much, but figure you're paying for the guy to risk life and limb. You figure a year's worth of peasant wages is somehow off base?
Certainly the army isn't going to be the same size as the population. That's lunacy, unless your population is *amazingly* productive. England, in 1086 had an estimated population of 1.5 million people. In 1300 it was more like 4 million. A kingdom of 10,000 has the population of a smallish modern town - it'd be one third the size of, say, today's rather sleepy suburb of Lexington, Massachusetts.