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Comment by neilwilson | Hacker News Reader

"But I think in practice not taxing wealth (property) and taxing contributions to producing things of value (income) is bad. "

That assumes taxes are there to raise money. They're not.

Taxes are there to raise armies, not money. Government doesn't need any more land to do its work. Nor does it need money, since it is the currency issuer. What it needs is manpower. That manpower has to be released from the private sector who would otherwise employ them.

Therefore the most effective taxation is one that leads to fewer job offers from the private sector of precisely the sort of people government needs to hire to do its work.

Land and property is the least effective taxation that requires a large amount of fungibility in the economy to deliver the people government needs to hire, and is the least countercyclical to the business cycle.

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> Taxes are there to raise armies, not money.

Perhaps that baseless assertion rings true in the US, where the dominant anti-state and anti-social policy political views create a vicious cycle of sabotaging public services followed by arguing public services should not be provided because they are badly managed.

In Europe, whose countries have been criticized by US politicians for spending under 2% of the national budget in their armed forces, money tends to be mainly spent on healthcare and social programs.

> In Europe, whose countries have been criticized by US politicians for spending under 2% of the national budget in their armed forces

The criticism (whether I agree with it or not) is that Europeans largely live under the umbrella of US protection. The US contributed $73 billion to NATO in 2020 compared to Lithuania's $1 billion [0]. Who is more likely to drag the other one into a conflict with Russia?

[0] https://www.visualcapitalist.com/this-is-how-much-nato-count...

> The criticism (whether I agree with it or not) is that Europeans largely live under the umbrella of US protection.

That was Trump's inflammatory and subjective accusation, but the only objective criticism was that most counties in NATO did not met the 2% GDP target for expenditure on their armed forces.

The US reportedly spends 3.5% of its GDP on their armed forces.

https://www.statista.com/statistics/266892/military-expendit...

Consequently, it's easy to see that OP's baseless assertion that "Taxes are there to raise armies, not money" is patently false, even when considering the world's leaders in military expenditure.

> The US contributed $73 billion to NATO in 2020 compared to Lithuania's $1 billion [0].

Completely irrelevant.

The US, the world's richest nation by far, has a population of around 329 million and it's GDP is around $21T.

Lithuania's population is around 1% of the US population (2.1 million, similar to New Mexico). Moreover, Lithuania is a pretty bad example regarding NATO's expenditure target, as it's military spending exceeds NATO's target (around 2.12% of its GDP).

GDP-wise, Russia is a kin to Italy, and the European Union's GDP is slightly lower than the US', at around $18T.

If you want a War on Poverty, you need an army to fight it.

It appears that allegory is a lost art in certain sections of the New World.

It's about manpower, not money

Wow so that must mean when the government really needs people to fight in a war they tax the working class really heavily, to encourage them to quit their jobs and make marching off to death more attractive.

Instead of say, implementing a draft?

"Instead of say, implementing a draft?"

That's taxing. They are no longer available for the private sector to hire are they.

As I said tax isn't about raising money. It's about releasing resources. As you've cleverly discovered, there is more than one way to do that - given government's monopoly on violence. Time, currency, land are all up for confiscation when you control the big stick.

Of course there's what to do with the hoard of cash the private sector isn't spending on hiring people, but perhaps you can read "How to pay for the War" and discover the mechanisms for dealing with that.

State and local government do need to raise money. Unless you want all local agencies to spend no more and no less than what the federal government decides to give them. They cannot issue currency.

State and local government can issue currency if they want to.

And yes, maintaining the peg and free movement means that the higher level government does decide what to give them. That's what giving up sovereignty at a lower level implies.

Even at local level, they need manpower, not land. So you end up relying on fungibility.

Would you trust currency issued by the sand government that can’t manage its own pensions?

State and local governments explicitly cannot issue their own currency. This was included in the constitution in article 1 section 10[1] after the US states dealt with all the issues of multiple state issues currencies that occurred during the short lived time under the Articles of Confederation.

[1]https://constitution.congress.gov/browse/essay/artI-S10-C1-2...

They cannot.

I'm also not exactly sure what you mean by your manpower statement. Say a town wants to build traffic lights and a new intersection. Surely it's easier to collect money and pay an outside firm (which may or may not have local employees) then engineer the road/lights locally?

Same with police. They use tons of tools and systems to both do their job and internally. Obviously raising money is going to be more efficient than each town designing its record management tools from scratch.

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