Re: What if and Why of Zero Taxation

["John O'Donnell" <jackodonnell@xxxxxxxx>]

The problem of substituting either borrowing or forced
saving for taxes is that elimination of taxes removes the
source of value from a fiat currency. All these schemes
address is affecting the amount of value once the status of
valuable has been established.

Before discussing the amount of value a currency has one
must first ascertain the currency has value.

John Gelles wrote:
>
>         Berglund, Hummel and Winslow almost reached
>         the "why" of this subject on the 'Korean War two
>         currency' thread.
>
>         -- If no taxes were collected than government
>             spending would either keep adding new money
>             to the economy or government would have to
>             borrow old money from firms and individuals
>             to match its spending the way taxes can. --
>
>                 Paraphrase of Per Berglund
>
>        --  Zero tax revenues would require that the
>             Treasury finance its spending by borrowing
>             from the public or from the central bank. --
>
>                 Paraphrase of William Hummel
>
>         The above mention of "what if" does not make
>         explicit another form of borrowing that would
>         allow the Treasury to spend budgeted money
>         without balancing it to budgeted tax revenues.
>
>         Such form of borrowing could be public savings
>         deposited with the Treasury.
>
>         Now to the "Why":  IF instead of paying taxes,
>         taxpayers only saved the same amounts, the
>         taxpayers would feel comfortable. Saving in
>         lieu of taxes would be seen as protecting the
>         value of money -- not taking the shirt off a
>         taxpayer's back.
>
>         When the time came for taxpayers to spend
>         some of these savings, the economy would
>         have to have grown in the output of things to
>         buy sufficiently for such spending to have
>         no effect on price.
>
>         This appraoch to zero taxation highlights the
>         main purpose of taxes as a tool to prevent
>         hyperinflation. Savings deposited with the
>         treasury do the same thing.
>
>         If we would avoid deflation and recession,
>         we should also avoid taxes.
>
>         If we would avoid high inflation and hyper-
>         inflation, the use of such special savings in
>         place of taxes will have to be well managed--
>         there may be times when spending of such
>         savings would have to be temporarily
>         controlled.

--
			-- jbod

		Tax Privilege, Not People
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