Pretty sure that argument doesn't actually work, though the reason why is a little subtle. Sure, the money doesn't stop at its first use, but whatever goods or

Pretty sure that argument doesn't actually work, though the reason why is a little subtle. Sure, the money doesn't stop at its first use, but whatever goods or services the money is spent on by consumers do. That is, if this tax revenue isn't replaced by some other equivalent source of tax revenue its disappearance will increase the amount consumers have available to spend in nominal non-inflation-adjusted terms by £35 billion a year without creating any correspending increase in the goods or services available to purchase - the government still needs to do all the things that were "funded" by that fuel duty and road tax after all. This is not in any way offset by the fact that whatever that money is spent on is subject to VAT, causes wages to be paid that are subject to PAYE, and so on, even though it sems like it would eventually cause all the money to end up in the government's pockets anyway. The VAT when that money is initially spent is included in the £35 billion figure, and any taxes after the money is spent are irrelevant since the money had already become actual, final consumer spending involving actual consumption of goods and services. This is a much more useful way to think about taxation and the need for tax. By your logic, the actual tax levels don't matter - 100% of money will end up in the government's pockets eventually after all.