Ask HN: If there's no corruption, why can't inflation tax replace all other? | Hacker News Reader

Ask HN: If there's no corruption, why can't inflation tax replace all other?

5 pointspacavaca9 comments

Inflation creates short term thinking (spend don’t save). The other downside is inflation is quite regressive.

Personally if we are going to dream about changing the tax system then Georgism is the way to go [0], but good luck getting political support.

[0]. https://en.wikipedia.org/wiki/Georgism

The r/georgism subreddit has some interesting articles on the topic.

Taxes are how the government makes a sovereign money worth something. You need dollars because you need to pay taxes in dollars.

You might want to read some Modern Monetary Theory: http://neweconomicperspectives.org/modern-monetary-theory-pr...

Note that "modern monetary theory", despite the name, is not a mainstream economic perspective.

No what makes sovereign money have value is the threat of violence. The government could force the population at the end of a gun to accept payment for the goods and services it wants with no taxation (i.e. give me X and take this paper token in exchange or you and your family will be shot). Taxation is just a more polite version of a shakedown.

In practice since most taxation is just used to pay for goods and services the population wants there is popular support for taxes. In places where taxation is more outright theft, tax avoidance is rampant.

The tax system has to be very complicated so:

1. Consultancies, accounting firms and senior government make huge amounts facilitating it

2. Enables evasion by the rich and punishment of the poor!

3. We don't realise how much tax we're paying on stuff

Right. That's pretty much why I'm asking. From the engineering standpoint it just doesn't make sense to have all these organization, they're just adding a huge overhead to the system. However, I agree that it is how it is for a reason, just trying to understand the driving forces that form the current taxation system.

the Fed's ZIRP is an inflation tax. The benefits are just distributed to those with access to the borrowing window

But there is corruption. Any plan that involves changing human nature probably isn't going to work.

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