4 ms·
The purpose of tax is not to raise money to government, but to redistribute wealth. The government prints money to cover the bill of its expenditure. If it issu
by James_K 2y ago
The purpose of tax is not to raise money to government, but to redistribute wealth. The government prints money to cover the bill of its expenditure. If it issued no taxes, then that burden would fall on all people through inflation, affecting the poor moreso than the rich. Taxes are an issue separate from spending that allows the government to move money down from rich to poor, and in doing so offset the inflationary effects of spending. This is why tax is a solution to rent. Rent is poor people giving money to rich people, and tax allows you to reverse that flow.
- jbjbjbjb 2y agoThat’s just wrong on so many levels. If I look at just one error, inflation doesn’t affect everyone it is a tax on savers ie the rich. Wages and prices go up with inflation (prices by definition), but cash and savings go down in real terms.
- Spooky23 2y agoLook around, bro. Hard assets get more expensive and return on those assets don’t decline. Thats why studio apartments are $1200/mo in Buffalo, NY. Lol People with money pretty readily deploy that money into investments that beat inflation.
- jbjbjbjb 2y agoSure but rich people also have lots of cash and bonds, at least more than the poor. Poor people don’t have either, their best inflation hedge is borrowing.
- mixmastamyk 2y agoRich folks don’t keep their money in savings accounts. Rather real estate and securities, which scale with inflation.
- jbjbjbjb 2y agoThe global bond market is bigger than the global equity market - look it up. It’s held by someone and it ain’t poor people.
- mixmastamyk 2y agoBonds can respond to inflation in a few ways. Tips, shorter terms. If you locked in a low rate, long term, yes.
- jbjbjbjb 2y agoYou could do floating rate notes too. But fixed rate bonds are by far the largest portion of the bond market and cash on hand is always a big component.
- gghhzzgghhzz 2y agodebt goes down in real terms but "tax on savers ie the rich" rich normally are rich enough to protect their savings from inflation. e.g. by putting it in an effective monopoly - land or housing (housing is a monopoly if you also are rich enough to have some influence on what / where houses are built / not built)
- hgomersall 2y agoThe purpose of tax is to free resources from the private sector so it can be purchased at non-inflationary prices (as well as driving the currency). The actual financial operations of the UK make it clear that taxes at the national government level are not used for paying for anything, as you rightly point out: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4890683 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4890683