In most western countries (EU aside), governments have central banks capable of literally minting an unlimited amount of currency. The US government can create an unlimited amount of US Dollars, Canada with Canadian, UK with Pounds, Japan with Yen. If the government can, by definition and at a keyboard stroke, create as much currency as it wants, it becomes self-evident that the purpose of taxation cannot be the funding of the state, because the state can get an unlimited amount of funding without recurring to taxes.
Taxes are a form of money destruction, i.e., removal from the private sector. This serves anti-inflation purposes, but also can be used to redistribute wealth (by destroying more currency from individuals with more wealth than others), to discourage behaviors (destroy currency when consuming unhealthy products such as sugar of tobacco through specific taxes), and also importantly, to enforce the usage of your currency (if people are compulsorily and regularly taxed in one currency, they need to earn that currency, and if they don’t they’ll be subjected to penalties).
That’s one way to look at it, but not how the accounts are drawn. If they are creating more than they are ‘destroying’ then is that really destroying anything? Regardless, to control inflation, or to balance budgets, it’s part of a complex system that balances resource availability, and promotes productivity.
That’s one way to look at it, but not how the accounts are drawn
The accounts ideologically being drawn otherwise is purely political, and the fact that neoliberalism propagates lies about the way taxes work is a tool to serve the powerful. If people realize we could just create money to make state-funded job guarantees with low risk of inflation, capital is fucked.
it’s part of a complex system that balances resource availability, and promotes productivity
Austerity policy has kept Europe at essentially 0 net growth on average since 2008. That doesn’t look too productive to me
In most western countries (EU aside), governments have central banks capable of literally minting an unlimited amount of currency. The US government can create an unlimited amount of US Dollars, Canada with Canadian, UK with Pounds, Japan with Yen. If the government can, by definition and at a keyboard stroke, create as much currency as it wants, it becomes self-evident that the purpose of taxation cannot be the funding of the state, because the state can get an unlimited amount of funding without recurring to taxes.
Taxes are a form of money destruction, i.e., removal from the private sector. This serves anti-inflation purposes, but also can be used to redistribute wealth (by destroying more currency from individuals with more wealth than others), to discourage behaviors (destroy currency when consuming unhealthy products such as sugar of tobacco through specific taxes), and also importantly, to enforce the usage of your currency (if people are compulsorily and regularly taxed in one currency, they need to earn that currency, and if they don’t they’ll be subjected to penalties).
That’s one way to look at it, but not how the accounts are drawn. If they are creating more than they are ‘destroying’ then is that really destroying anything? Regardless, to control inflation, or to balance budgets, it’s part of a complex system that balances resource availability, and promotes productivity.
The accounts ideologically being drawn otherwise is purely political, and the fact that neoliberalism propagates lies about the way taxes work is a tool to serve the powerful. If people realize we could just create money to make state-funded job guarantees with low risk of inflation, capital is fucked.
Austerity policy has kept Europe at essentially 0 net growth on average since 2008. That doesn’t look too productive to me