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I got downvoted last time I said this, but with fiat money there is no reason for anyone to pay income taxes. Obviously there is no correlation between income t

• 988747 5y ago
  The point of income tax isn't revenue - that comes from printing money, or from corporate taxes. Income tax is basically a surveillance tool - it forces you to declare all your income sources, and a large part of spending (if you want to claim some tax breaks).
• colinmhayes 5y ago
  This is a shit take. Please refrain from commenting on things you are clueless about. I don't have time to explain macroeconomics to you, although I'd encourage you to study yourself. Suffice to say the government can not, and does not pay for itself by endlessly expanding the money supply. That is one tool it has, but if overused causes severe inflationary problems. One of the US's biggest strengths is the reliability of its currency to inflate at 2-3% a year.
• pg5 5y ago
  Do you mean removing income tax or also sales tax, property tax, etc?
• twiddling 5y ago
  How do you fund the framework that secures your rights?
  • fighterpilot 5y ago
    > How do you fund From the GP... > The government takes some of that value by simply creating more dollars.
    • riffraff 5y ago
      which have no value, because the value they have derives largely from the ability to pay taxes with them. OP's comment makes no sense.
      • fighterpilot 5y ago
        Why does the value of a currency derive largely from the existence of income taxes?
        • c22 5y ago
          Because they induce a demand that might otherwise be satisfied by a different currency.
          • fighterpilot 5y ago
            The low inflation in the US before income taxes were introduced falsifies the argument, no? No other currency was widespread in the US prior to income taxes. I still don't actually understand the argument, to be frank.
            • c22 5y ago
              The US used to exchange gold for dollars which gave them inherent value. That is no longer the policy and other currently existing currencies do posses the potential to compete with USD. Why would I choose to settle my debts in a rapidly-inflating currency that is backed by nothing?
              • fighterpilot 5y ago
• HPsquared 5y ago
  If there was no taxation, there would be no "compelling" reason for anyone to keep using the currency (which would be also losing value directly by the increase in money supply from government spending). In other words, even under MMT taxation is necessary to limit inflation.
  • 300bps 5y ago
    Not sure why you’re getting downvoted. Having to pay taxes in US dollars or go to jail is a strong incentive for people to continue their business operations with US dollars.
  • pxue 5y ago
    Is that 100% true though? Some estimate maybe only 10% of Chinese individuals pay tax. Individual taxes account only about 8% of China's tax revenues. Bulk of the tax burden comes from consumption and business. I'm all for that. If I make a million dollars but I live frugally and invest my money, why should I pay 50%? Sure the argument for individual taxes are about social wellness but how do you justify that when businesses are avoiding billions of tax legally. Make no sense.
    • HPsquared 5y ago
      That's fair enough, I was more referring to overall taxation in the economy creating a stable demand for the currency, it doesn't have to be levied on personal income specifically.
    • arbitrary_name 5y ago
      Because you likely made a million dollars using the benefits of the government. I.e. you had an educated workforce who drove on government roads to get to the factory, you were able to protect your ideas via copyright with the threat of government enforcement, etc. Nobody gets rich by themselves unless they are a pirate.
      • adolph 5y ago
        > Nobody gets rich by themselves unless they are a pirate. Is your claim that pirates generate economic value even in the absence of other people? Or is it a claim that pirates lived in anarchical democratic communities whose thriving in the absence of government exemplifies Taleb's idea of anti-fragile?
• coralreef 5y ago
  Taxes remove money from circulation, helping to control the inflation caused by creating new money.
  • Turing_Machine 5y ago
    So your thesis is that the government just sits on the tax money, rather than using it to purchase goods and services as fast as it comes in?
    • coralreef 5y ago
      No it's not a thesis, it's how modern government (and accounting) works. Back in the day when money was a hard asset that could not be easily created (copper, silver, gold), you paid your coin dues to the regional king, and in turn he paid for security/services over the land. That was taxation. We eventually stored our precious metal in banks, and traded paper coupons representing those metals. We formed governments, who decided one day to revoke the ability for people to redeem their paper coupons for their gold. Now we still had to pay taxes with paper money, but it was no longer attached to gold's value. The government/central bank now had the ability to create money at will, and does not physically need to rely on tax dollars coming in: it can create the money, pay for services, and collect taxes later. If it spends more than it collects, it has a deficit. This deficit can be funded by creating new money (in turn devaluing it, aka inflation), or by borrowing money that already exists (raising money through bonds). So every year, when you wire your tax money to the government, bits of data are simply written to a database, indicating money removed from your account. There is no physical transfer of assets to the government; remember, the money that was paper is now digital. Money is numbers in a database. Management of money at the macro level is now just balancing accounting inflows and outflows, surplus and deficit. Debt can be infinitely be paid off (create more money) at the consequence of devaluation of course.
      • Turing_Machine 5y ago
        > So every year, when you wire your tax money to the government, bits of data are simply written to a database, indicating money removed from your account. There is no physical transfer of assets to the government But there is.The government uses the tax money (plus extra money that they create out of nothing) to buy goods and services. Lots of them. Physical assets such as roads. F-35 fighters. Aircraft carriers. Schools. Services such as file clerks. Accountants. Public health doctors. All of those things represent increased demand, which in turn result in net price increases (i.e., inflation). The money goes right back into circulation, rather than being removed from it, as you claim.
• bluedevil2k 5y ago
  Printing the money would create uncertainty - how much will the government print? How much will inflation be? How will the dollar fluctuate against currencies of trading partners? Uncertainty kills business and this plan would hurt every aspect of trade and manufacturing.
  • adolph 5y ago
    How is that hypothetical different from what exists now?
    • bluedevil2k 5y ago
      The Fed has a 2% inflation target (used to be their only stated target, now they balance unemployment in their target numbers as well). This allows companies to plan ahead knowing with a fair degree of accuracy the expected change in purchasing power year to year.
      • adolph 5y ago
        That sounds like the answer to your own question, no? The root comment proposes that "They just create the money they need, the never-to-be-paid-off deficit grows, the value of the dollar shrinks, and we move on." How is that incompatible with an inflation target that "allows companies to plan ahead?"
        • bluedevil2k 5y ago
          No, not at all. How much will they print? 23% of GDP? 18% of GDP? That’s $1T difference in cash. How will that affect inflation? Who knows, no one can predict that. A shrinking dollar is bad for imports and America has a huge trade deficit right now, it would cripple international trade.
          • landemva 5y ago
            Tough luck that until some months ago, USA was a net energy exporter. Definitely do not want to ask why energy exports flipped to energy imports. Recall that a few days ago Joe asked Saudis to help out by pumping more oil.
• artonge 5y ago
  I would argue that wealth distribution is also a good reason to have taxes.
  • CountDrewku 5y ago
    Then why isn't it working right now?
    • frockington1 5y ago
      If you look backwards to when the income tax was first started it is working
• ibejoeb 5y ago
  You just need to account for jurisdictional apportionment. Only the fed can print money. How does that get allocated? Sales tax and property taxes, which presumably would continue to exist in under this scheme, would do some I suppose. Would there still be jurisdictional income taxes?
• opwieurposiu 5y ago
  The feds could be funded by inflation as you describe, in fact they already are to a large extent. State and local govs that do not print money should be funded by land value tax, as it is the least bad option. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
• bwb 5y ago
  Taxes create civilization and they power most of the things we love about society... roads, infrastructure, retirement, keeping the environment protected, keeping food safe, keeping restaurants from giving us all rat poop, etc etc... the list is very long. I never understood people who don't like taxes. I totally get not liking how much they are or where the spending is going, but they literally are civilization. To your 2nd point, money is psychological, that model might happen one day but right now that is not something lenders can get behind. Although you could argue MMT and the current system is headed that way. Taxes are also psychological to help you feel like you are part of the system, and not outside of it.
  • zionic 5y ago
    This is reversing cause and effect. The population creates a civilization that creates wealth for the government to tax.
    • bwb 5y ago
      I would argue you are reversing it. The people create government which creates a platform that creates greater wealth, which the government gets a percentage of through taxes to further improve the platform... repeat.. repeat...
  • ezekg 5y ago
    > Taxes create civilization and they power most of the things we love about society... roads, infrastructure, retirement, keeping the environment protected, keeping food safe, keeping restaurants from giving us all rat poop, etc etc... If those things are important, citizens would fund these with or without government coercion through violence. Keeping food and restaurants safe is a function of a free market -- nobody would buy from a business that routinely tries to poison their patrons. These arguments are old and they don't hold up.
    • bwb 5y ago
      Hah nah, that just isn't true, look at history at any point. By enforcing regulations to ensure clean restaurants and food, that market has grown so much bigger because people trust eating out by default.Don't overestimate the power of trust in growing a platform. If AirBNB poisoned you every 6th stay, how long would you use them? Sometimes I am stunned with how libertarian some of these comments are. Government is just us, and it is a amazing because it isn't free market. The free market only works when given strong bumer rails to stay between, otherwise it starts taking advantage of the system and causing environmental damage, damage to labor, etc... The free market can't do a lot of things. It can't provide high quality health care, it can't provide economic protections, it doesn't provide protections for labor, so many things.
• spywaregorilla 5y ago
  This is effectively arguing that because the eventual end state is the same, it doesn't matter what path we take to get there. But that's not true, it matters a lot, and there's a universe of externalities to what you suggest. Deciding we're just not going to collect taxes anymore and that we'll pay off debts by printing out extra dollars would have enormous effects on bond prices, international trade, the US dollar benefiting from being the premiere currency of the world, etc. Stupid idea.
• platz 5y ago
  Tax is the moral basis on which democracy is predicated https://www.youtube.com/watch?v=8Qsl6QUlWVc https://www.youtube.com/watch?v=8Qsl6QUlWVc
  • clipradiowallet 5y ago
    To be slightly pedantic, the US system of government is a federal republic[1] that includes some democratic concepts. An example of those concepts is the democratic election of representatives at a state and federal level. [1] https://en.wikipedia.org/wiki/Federal_government_of_the_United_States https://en.wikipedia.org/wiki/Federal_government_of_the_Unit...
  • zionic 5y ago
    That makes perfect sense because taxation is theft and immoral. It is therefore consistent that the moral basis for our unjust society is itself unjust.
  • adolph 5y ago
    Prior to the mid 20th century, a poll tax was implemented in some U.S. state and local jurisdictions and paying it was a requirement before one could exercise one's right to vote. After this right was extended to all races by the Fifteenth Amendment to the Constitution, many Southern states enacted poll taxes as a means of excluding African-American voters, most of whom were poor and unable to pay a tax. https://en.wikipedia.org/wiki/Poll_tax https://en.wikipedia.org/wiki/Poll_tax
• barrkel 5y ago
  People would move their income streams into non-$ denominations, keep their bank accounts in foreign currencies and so on to avoid the inflationary effect. Further, it would be a regressive tax, not even flat, in practice: poor people are more reliant on cash and short term income which can't be diverted to a different currency. And even if high income people couldn't switch currency, flat taxes are already regressive on a marginal utility basis. Every extra dollar of income or wealth has less utility, because you no longer need to cover essentials like shelter and food, but are spending on entertainment, higher and higher quality, or Veblen goods, etc.
• jaguar1878 5y ago
  Taxes are hugely complicated because they are trying to do two different things at the same time: combat inflation and enact policy. If we just printed dollars to pay for all gov expenses, we would probably have a lot of inflation. Inflation hits all holders of dollars equally (on a percentage basis). Taxes allow us to spread the burden of shared costs (like infrastructure) in a different way. Additionally, taxes act as a feedback mechanism on behavior. We can incentivize some things by giving tax credits for doing them, and we can disincentivize other things by charging higher taxes on them. Balancing these two effects of taxes: inflation and policy, is hard. If the gov. wants to encourage everyone to buy an electric vehicle, we could give a big tax incentive to do so, but that reduces overall taxes, which means more inflation. To combat this, we have to print fewer new dollars or increase taxes somewhere else. This is one of the big challenges for the Federal Reserve, they don't get to pick how much tax is collected, just how many new dollars are printed. If congress doesn't collect enough tax, there's only so much the Fed can do to balance things.
• rufus_foreman 5y ago
  >> with fiat money there is no reason for anyone to pay income taxes Well you immediately give one reason people pay income taxes, so government can control behavior. Another is that the current income tax regulations provide the government with a justification for massive invasions of your privacy. These are both compelling features of an income tax.