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In theory in a model where the government just prints it’s own expenditures, your taxes are in the form of inflation. The biggest issue with this aside from cr
by brockwhittaker 6y ago
In theory in a model where the government just prints it’s own expenditures, your taxes are in the form of inflation.
The biggest issue with this aside from creating an unpredictable currency is that everyone’s effective tax rate would be the same, so you would have to reinvent the welfare system to recreate progressive taxation levels.
- woofcat 6y agoYou're correct, however unless you restricted the exchange of currency you'd have people paying no taxes. Imagine two people each get paid $1000 USD and the available currency is doubling weekly. The first person simply holds on to their money in cash. At the end of the week their money is worth half as much. The second person buys Euro's the day their paid, and one week later they can exchange back to USD for $2000. That person effectively paid 'zero' taxes.