Taxes, Redistribution of Income, Global Problems

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

ARE TAXES NECESSARY?  NO.

THE POWER OF FOREIGN FIAT MONEY,
EVEN THOUGH IT IS  NOT ACCEPTED
IN PAYMENT OF YOUR TAXES

• Some scholars wonder if the obligation to pay money taxes to your country is necessary for money's utility in domestic and foreign trade..

• Can a well managed fiat money motivate production at home, and compete in the global currency market, IF it is issued by a nation that collects no taxes?

• One obvious example of fiat money that works fine -- but can't be used to pay your taxes -- is foreign currency:  like the dollar, yen and euro that hold their value as they cross tax collectors' borders.

• Another example of fiat money's power (or lack thereof) is the fact that a nation with nearly worthless money cannot give it value by raising taxes. It must raise production and sales instead.

  Property offered for sale   for a particular currency is the only way to make that currency work.

• The power of money to work is based on production of real things:  real things that are bought with it so often, its reputation for purchasing power precedes it -- as it enters any market.

  IF a nation with nearly worthless money can produce and sell a great many works of art (for its currency) then, while such sales hold up, its currency will be "worth its weight" in dollars, yen and euros.

• IF that same nation pulls up its socks, i.e., creates an efficient system of reasonably distributed private property, with all who can work the land and manage a business protected by property laws, and it ends private and public monopoly (with rare exception), then, with domestic production of domestic needs  AND  lawful money in support of contracts of sale -- but no taxes -- that nation will succeed.

It will pay for government purchases by spending money into circulation.

It will remove money from circulation by protecting (indexing) hoarded savings from inflation.

Private savings will be in a race with technology -- with the nation involved determined to see advances in technology increase real output (and inventories of valuable things held for second-hand sale) as fast as savings accumulate.

Lotteries, entertainment and travel, may be employed to drain any excess money that this no-tax system may generate.

• Will there be a need redistribute income, as such, IF property and production is well distributed by anti-monopoly and fair trade law?

  The answer is "No".

  Specific enforcement of property right protection for private producers, coupled with government's power to manage the nations money in the public interest, will do what the graduated income tax failed to do.

  The GIT never had a program to raise the minimum standard of living by systematic protection of free and fair enterprise.

  Now we are facing another problem -- the race to the bottom and race to lowest money "cost " producers. The GIT and private interest bank controlled money were never designed (or allowed to evolve) to face up to this probem.

  We must re-industrialize America and simultaneously build a middle class in nations recently helped to manufacture what we buy. This will take radical rethinking of money, interest, price and taxes.

  The Open Policy Seminar's goal is to encourage that rethinking

 

John Gelles   www.tiea.us/tops.htm