Re: What if and Why of Zero Taxation

["John Gelles" <johng@xxxxxxxxxx>]

        The reasons for repealing all taxes whose purpose
        is to divert economic output from private producers
        to government are many:
            1. Taxes are not necessary for such diversion.
        Money is sufficient to divert the output. Government
        can create the money by spending it.   NO other
        customer can do this.
            2.  Generally private producers have too much
        output and welcome sale to government for money
        --if the money is sound.
            3.  Keeping its money sound is government's
        task. Sound means NO taxes when there is excess
        output AND imposition of taxes when necessary
        to punish activities that would otherwise tend to
        destroy the value of money to serve the public
        interest.

        Gunnar Tomasson considered the Zero-tax
        option and advised: me that "Money, Bonds
        and Taxes are three alternative means of
        diverting part of the economy's output of
        goods and services from Factor Income
        Recipients to Government."

        As I say, above, of these three means, money
        seems to be the best for as long as it works.
        Money can be issued by any sovereign. Taxes
        are far harder to collect than money is to issue.

        Now some people worry that issuance of
        money by government spending will quickly
        run out of production to buy at an affordable
        price. This will not happen if the money issued
        and spent once is not fully re-spent by those
        to whom it is first paid.  If some is "saved" by
        depositing it with government, the effect will be
        to keep prices affordable.

        Assuming this process goes on a very long
        time, will the "saved" money every be with-
        drawn from government and spent? Will its
        spending after, say ten years, not raise
        prices?

        Well that will depend on production and
        spending by people, firms and government
        at that time.  If there is shortage of, say, food
        or medicine, at that time, it may be that
        to keep price affordable government will
        have to invest in facilities to raise supply of
        food and medicine.

        In all events, if government has to avoid
        deflation, unemployment and inflation, only
        the taxless-debtless-money approach has
        ways to do it. The credit-money approach
        has no way to avoid unemployment or
        deflation.. It's fine as far as it goes--as a
        substitute for private IOU's.
                But in the face of over-production and
        under-investment in public assets, taxless-
        debtless-fiat-money appears to be a
        good solution.