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"If there was no taxation, there would be no "compelling" reason for anyone to keep using the currency ..." This is correct. Remember: no matter what you have
by rsync 5y ago
"If there was no taxation, there would be no "compelling" reason for anyone to keep using the currency ..."
This is correct.
Remember: no matter what you have and no matter how valuable it is - you cannot pay your taxes with anything but your local currency. This is not a coincidence.
You cannot pay your taxes with gold bricks or with diamonds or with the Mona Lisa. You cannot trade highly liquid stocks or valuable real estate. You must sell those things to buy dollars.
It will never be otherwise. The point of the dollars is to have something that you must buy in order to pay your tax dues.
- thehappypm 5y agoThis actually expands further than taxes and expands to all government services. Water bill, inspections, sewer. Those institutions will always only accept dollars, and that backstops the value. Thought experiment: rampant inflation happens and the dollar inflates 10x. My $1M house is now worth $10M. It's reassessed (because I don't live in California) and now my tax bill is suddenly $100,000 / year instead of $10,000! I need to acquire $100,000 or I go to jail. So I start selling assets into dollars. This deflates the dollar. Everyone does this simultaneously and the dollar goes back to its natural value.
- debug-desperado 5y agoI believe all US debts to private creditors can be settled in dollars. Any debtor can take a creditor to court if the creditor tries to demand payment in other forms.
- deleted 5y ago[deleted]