What you're describing is called debt monetisation. People tend to be scared of it because if it isn't used responsibly it can cause all sorts of nasty market distortions. The principal ones being inflation and loss of trust in a currency (which are sort of two sides of the same coin).

If it is used responsibly, it's just another tool of monetary policy, and an effective one at that. But using it is a bit like crossing the rubicon, because once the precedent is set, it's hard to go back.

The other point is that taxes have several aims: to fund government spending, to influence behaviour, and to redistribute wealth. A tax via inflation would distribute wealth away from people on fixed incomes (e.g. people who can't negotiate a pay rise). That would tend to favour people who are already wealthy.