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It won't. That's not what taxes are for. "The necessity for a government to tax in order to maintain both its independence and its solvency is true for state a
by neilwilson 8y ago
It won't. That's not what taxes are for.
"The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.
The first of these changes is the gaining of vast new experience in the management of central banks.
The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.
Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity."
Taxes for Revenue is Obsolete - Beardsley Ruml (Chair of New York Fed 1946)
http://home.hiwaay.net/~becraft/RUMLTAXES.html http://home.hiwaay.net/~becraft/RUMLTAXES.html
South Korea is overtaxed for the size of government it has. As is any nation with any long term unemployment.
- vijayr02 8y agoThat’s not true if you have free movement of capital across the national border. Debt is a claim on future productivity of the nation, and if a necessary share of the national income is not being claimed through taxes to service the debt, capital will exit to brighter climes. That statement may have been true in 1946 when the US was the only non-shattered developed economy in town but it’s hardly axiomatic.
- RobertoG 8y ago>>"Debt is a claim on future productivity of the nation, and if a necessary share of the national income is not being claimed through taxes to service the debt, capital will exit to brighter climes. " What debt? The grandparent is telling you that debt is not necessary to finance a state that control its own floating currency.
- vijayr02 8y agoI don't read that? The quote says that taxes are not needed by a country that does not promise to convert its currency into gold etc. It says nothing about whether that country had issued debt outstanding or not.
- nybble41 8y ago> debt is not necessary to finance a state that control its own floating currency It is if you wish to avoid runaway inflation. Even countries which have cast off the fetters of the gold standard (or equivalent) have found that there are still limits to the rate at which they can issue currency. Moreover, once the implications sink in people just index prices (including wages and interest rates) to the expected rate of inflation and you're right back where you started.
- TheCoelacanth 8y ago> you're right back where you started That's kind of the point. Enforce taxes so that people have less money or print money and raise inflation so that the money people have is worth less, either way the real consideration is how much of the nation's productivity you are using, not how you are getting the money.
- vijayr02 8y agoTaxes don't cause people to have less money - they're purely a redistributive process
- spindle 8y agoI totally agree, but that's because I've read more details about this idea elsewhere. Could you (or someone else) please post citations to more explanations?
- RobertoG 8y agohttps://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory