3 ms·

Modern Monetary Theory argues that income tax (and alll other direct taxes) are unnecessary because the government can riase fund via fist money and its indire

Modern Monetary Theory argues that income tax (and alll other direct taxes) are unnecessary because the government can riase fund via fist money and its indirect taxation via inflation. This is effectively a tax on the entire economy and challenges every sector or segment to grow price (including labor wages!) or lose value.

rataata_jr 8y ago
This is why we need crypto to become mainstream.
RobertoG 8y ago
That's not what MMT argue precisely. The idea is that (for sovereign governments with its own currency) the government is the issuer of money and logically doesn't need to get money from the population or to borrow it in any market. Taxes have three possible purposes: create demand for the currency in the population, discourage some kind of spending or managing inflation. MMT stress that almost the only limit for government spending is inflation and that the concept of 'public debt' is irrelevant. What makes a country rich or poor it's not how much money have but what resources (natural resources, population, knowledge, infrastructure..) it has. The obvious corollary is that the way of improving the life of the future generations is not 'saving' or reducing the 'public debt' but investing in the country now. See a short overview here: https://theconversation.com/explainer-what-is-modern-monetary-theory-72095 https://theconversation.com/explainer-what-is-modern-monetar... For example, related to the subject at hand, if the Chinese government wanted to start a big infrastructure project, being the issuer of the currency, it doesn't need any kind of external financing or taxes. What could happen is that if the new project represent a big drag in the total economy, inflation would appear. A possible way of controlling this inflation is by retiring money from the economy by taxation.

3 ms·

Modern Monetary Theory argues that income tax (and alll other direct taxes) are unnecessary because the government can riase fund via fist money and its indire

by fjsolwmv 8y ago

rataata_jr 8y ago
This is why we need crypto to become mainstream.
RobertoG 8y ago
That's not what MMT argue precisely. The idea is that (for sovereign governments with its own currency) the government is the issuer of money and logically doesn't need to get money from the population or to borrow it in any market. Taxes have three possible purposes: create demand for the currency in the population, discourage some kind of spending or managing inflation. MMT stress that almost the only limit for government spending is inflation and that the concept of 'public debt' is irrelevant. What makes a country rich or poor it's not how much money have but what resources (natural resources, population, knowledge, infrastructure..) it has. The obvious corollary is that the way of improving the life of the future generations is not 'saving' or reducing the 'public debt' but investing in the country now. See a short overview here: https://theconversation.com/explainer-what-is-modern-monetary-theory-72095 https://theconversation.com/explainer-what-is-modern-monetar... For example, related to the subject at hand, if the Chinese government wanted to start a big infrastructure project, being the issuer of the currency, it doesn't need any kind of external financing or taxes. What could happen is that if the new project represent a big drag in the total economy, inflation would appear. A possible way of controlling this inflation is by retiring money from the economy by taxation.