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To be clear, our government is not funded through taxation. If the government is the sole issuer of a currency then the government is also capable of paying for
by zaksoup 8y ago
To be clear, our government is not funded through taxation. If the government is the sole issuer of a currency then the government is also capable of paying for anything and everything priced in that currency, full stop.
To put it another way...
Question: those dollars you have in your pocket, where'd they come from?
Answer: The government issued them and they eventually found their way to me
Question: How'd the government have them to issue them?
Answer: They taxed it from somebody else.
Question: How'd that person get those dollars?
Taxation is a method of controlling inflation and the implicit threat of violence isn't directly related or due to taxation, but rather it's connected to the government's monopoly on a fiat currency.
Our government is funded through being the monopoly issuer of a currency that it requires all transactions be priced in while enforcing that monopoly with the implicit threat of violence. Our government (and all governments that are monopoly issuers of fiat currency) additionally use taxation as methods of economic control, but not funding.
> it's in our best interest to ensure the overhead for collecting it is as low as possible
I'm not sure I agree with this. If the government is going to tax as a method of inflation control it's in our best interest that that taxation does the "least harm" and as a democratic society we have the opportunity to vigorously debate based on evidence and research how we define "least harm".
The simplest ruleset possible could easily be "everybody contributes $30k/year" (more or less what my annual tax burden is) but suddenly we're bankrupting a majority of Americans.
Perhaps "as possible" includes an implicit "without bankrupting a majority of individuals subject to the tax" but at that point "as possible" is just a doorway to say "taxing should be simple [except when it can't be]" and to me that's the same as saying "taxing is complicated" which is, finally, to say that I think it's really a whole lot of nothing interesting to say "I think tax rules should be simple".
Edit: And yes, I understand that State taxes (as opposed to federal taxes) do fund State services (Property Taxes -> Schools in CA, for ex), but the States are not monopoly issuers of a fiat currency... It's complicated and hairy but the reason I bring up the issue of funding via taxes vs. issuing dollars is because almost always in conversations about flat tax rates or "simplifying tax code" it's in reference to federal taxes and not state/local taxes.
- ric2b 8y agoWhat about the money banks create through fractional reserve lending? That ends up being significantly larger than the currency issued by the government, so the government might actually get more revenue from taxes than from money printing.