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> Without taxes, there's no money why?

• nsomaru 2y ago
  I believe the argument goes like this: "fiat" depends on a declaration by a government that something has value. The way a government does that is by declaring something legal tender and accepting taxes denominated in that currency. Contrast with a time when currency was pegged to a physical asset like gold and GBP so no depreciation in something like 300 years. Savings actually had meaning.
  • XorNot 2y ago
    What happens to the price of bread if the rate of gold mining outstrips the rate of bread production?
  • dools 2y ago
    Not quite. The government imposes a tax, the tax is due in the state's unit of account. The government can then spend its unit of account into circulation, and later accepts it back in payment of taxes. > Contrast with a time when currency was pegged to a physical asset like gold Even when a currency is constructed from a commodity, it is not the commidity that is the money. It is a commodity that bears the stamp of the sovereign. > and GBP so no depreciation in something like 300 years. Savings actually had meaning. When money was constructed from a commodity there was a terrible shortage of coin to support the economy and it was a horror show for almost everyone. It's certainly possible to have price stability and full employment, but if you're going to choose, a bit of inflation is much, much better than deflation.
• pstrateman 2y ago
  It's the only thing you really need money for. If you don't pay your taxes in your nations currency you go to prison.
  • grugagag 2y ago
    Do you not eat? How do you pay for food or utilities/rent? Do they take anything other than money where you live?
    • beaglesss 2y ago
      Those people only take dollars because every transaction has a third guy with a club demanding dollars from the other two, that makes it incredibly challenging for the currency to shift to something else. Without the third guy standing there with a club it's not clear if or why they would demand dollars.
      • ralferoo 2y ago
        I agree with the "taxes make the fiat currency" argument, but what you said isn't a good justification for it, because that third guy with the club probably isn't paying any taxes! Well, maybe sales taxes when he spends his ill-gotten gains, but that's indirect and if he's effective at intimidation with his club, he arguably doesn't need the money in the first place as he can acquire goods through other means. The more compelling argument is that we pay taxes primarily to enforce peaceful law and order, primarily through control of force - at home through the police and abroad through the army - so that our stuff isn't just taken by "someone with a club" and making it worth being part of a larger society.
        • IanCal 2y ago
          The third person in the analogy is the government, who demands payment specifically in dollars and who can use a remarkable amount of force if you don't pay.
          • dools 2y ago
            And also issues the money so "paying taxes" in a currency you issue is meaningless.
          • ralferoo 2y ago
            Hehe, I interpreted the comment as being in the absence of government, and in terms of how older societies used to pay a third party protection money (effectively a tax) to protect them from thefts etc from others, but who would intimidate, steal or destroy property if the money wasn't paid. You could argue that government isn't much different to a mafia, except that modern taxation is generally more transparent, fairer, impartial, and perhaps more considerate to the people with the least money. Also, they generally don't use force to enforce taxation, only the threat of a prison sentence.
• beaglesss 2y ago
  What would drive a currency with no demand? Money almost always ends up as a commodity itself (gold/silver/ramen packets/cigarettes), commodity backed, or as a token to prevent the state from tossing me in a tiny cage. In most crypto, the commodity isn't very clear. I attribute it's rise largely to the tax authorities and the FATF snuffing out anonymous banking and bearer shares and most high denomination notes around that time, creating massive demand for an alternative that crypto largely fills.
  • dools 2y ago
    Crypto "currency" is a very successful libertarian propaganda project.
    • immibis 2y ago
      Or as I like to call them, propertarians.
• Log_out_ 2y ago
  https://en.m.wikipedia.org/wiki/Somali_shilling https://en.m.wikipedia.org/wiki/Somali_shilling
• thaumasiotes 2y ago
  Surprisingly many people are willing to argue for positions that are directly falsified by even the most cursory investigation, that's why. Money is considerably older than taxation in money is.
  • dools 2y ago
    Nope, it's not. Accounting is the first writing, and the earliest form of "taxation" as an obligation to the group was fines imposed upon people as penance.
    • thaumasiotes 2y ago
      > and the earliest form of "taxation" as an obligation to the group was fines imposed upon people as penance. This is a strange thing for you to believe. There is no evidence for it, nor any suggestion that it's likely. Taxation in money is a recent phenomenon, well within the historical period, pretty much everywhere; before that, you have taxation in kind. (And, often treated separately, taxation in conscripted labor.) Penalties are generally the same. Monetary penalties do show up before monetary taxation does, but they apply to people who have money, not to everyone in general.