You may have misunderstood me. Barter transactions and foreign currency transactions are perfectly legal. At that point you have no dollar income, so you wouldn

You may have misunderstood me. Barter transactions and foreign currency transactions are perfectly legal. At that point you have no dollar income, so you wouldn't have to pay taxes _except_ for the fact that you do have to pay taxes on the dollar equivalent for those transactions. Provisions like those (together with legal tender laws) are necessary to prevent people from abandoning the "official" currency wholesale. Thus it seems that denominating taxes in a currency is a huge negative for a currency _in and of itself_. Edit: after reading further, I think I see the disconnect. I was thinking purely in terms of income taxes and sales taxes/import duties. For taxes in absolute terms, like property taxes or luxury taxes, then the government demands a certain number of dollars, which does mean I need to get that money, even if in my day-to-day life I don't use it, which creates a demand for the finite resource of US dollars. Still, the federal government in the US, anyway, does not demand any taxes of this nature, so it doesn't seem to follow logically that the taxes relate to the value.