Your taxes don’t pay for anything actually. States can create arbitrary amounts of currency (USD in the USA, GBP in the UK, Yen in Japan…), they don’t need your taxes to pay for anything.
Taxes have several purposes, the main ones being:
Forcing people to use the state’s currency by forcing taxes in that currency. Without dollars to pay your taxes denominated in dollars, you go to jail, so the currency you definitely need are dollars
Removing money from certain sectors or people to reduce inequality. Taxing the richest businesses and companies can lead to decreases in inequality and to a more level playing ground.
Removing money from the private sector economy altogether. Too much money in the private sector can, in some circumstances, lead to inflationary tendencies in market economies or to shortages in planned economies (though the relationship is more complicated than neoliberals want you to believe)
Disincentivizing certain behaviours. Easy example is a sugar or alcohol tax.
The state can invest arbitrarily big amounts of money feeding the hungry or housing the houseless without the need for taxing this money first. The relationship between state deficit and inflation is not straightforward, and in fact there’s no serious empirical evidence suggesting that, in developed economies, deficit is a good predictor of inflation. Inflationary episodes mostly can be explained through supply shocks, more easily than through state deficit (where deficit means the state pouring more money into the economy than it pulls out through taxes).
For more nerdy communist / MMT economics, reply to this comment 😎
Taxes are not a “scam” in as much as they serve the purposes I outlined above. However, knowing that it’s definitely not taxes funding things like healthcare or education, it’s good to examine all taxes with a critical lens:
Should we tax the poorest of workers at all? If one of the main goals of taxation is decreasing inequality, why do we charge income taxes at all to workers earning below the average for example? You could argue that we need to remove money from the economy for macroeconomic purposes such as inflation, but then let’s do it from the richest and not the poorest?
Fun fact: you can tell your libertarian friend that the DPRK (aka North Korea) abolished income taxes in 1974. If they hate taxes so much, they’re free to move there!
I don’t necessarily disagree with your point. Organizing the working class in well-lubricated organizations with the common goals of improving the material conditions in which we live is something I applaud. However, I wouldn’t start tackling taxes first of all. Income taxes maybe, at most, account for 50% of your income. However, surplus value stolen from workers by companies is closer to stealing 80% of your income (depending on a lot of factors). Companies earn a lot more money from our labor than they pay us back, and I would argue for the abolition of this private employer - employee relation altogether. What do you think?
Nerd communist / MMT economics time:
Your taxes don’t pay for anything actually. States can create arbitrary amounts of currency (USD in the USA, GBP in the UK, Yen in Japan…), they don’t need your taxes to pay for anything.
Taxes have several purposes, the main ones being:
Forcing people to use the state’s currency by forcing taxes in that currency. Without dollars to pay your taxes denominated in dollars, you go to jail, so the currency you definitely need are dollars
Removing money from certain sectors or people to reduce inequality. Taxing the richest businesses and companies can lead to decreases in inequality and to a more level playing ground.
Removing money from the private sector economy altogether. Too much money in the private sector can, in some circumstances, lead to inflationary tendencies in market economies or to shortages in planned economies (though the relationship is more complicated than neoliberals want you to believe)
Disincentivizing certain behaviours. Easy example is a sugar or alcohol tax.
The state can invest arbitrarily big amounts of money feeding the hungry or housing the houseless without the need for taxing this money first. The relationship between state deficit and inflation is not straightforward, and in fact there’s no serious empirical evidence suggesting that, in developed economies, deficit is a good predictor of inflation. Inflationary episodes mostly can be explained through supply shocks, more easily than through state deficit (where deficit means the state pouring more money into the economy than it pulls out through taxes).
For more nerdy communist / MMT economics, reply to this comment 😎
My libertarian friend says this same thing. Taxes are a scam and they just print the money they need.
But is it true ?
Taxes are not a “scam” in as much as they serve the purposes I outlined above. However, knowing that it’s definitely not taxes funding things like healthcare or education, it’s good to examine all taxes with a critical lens:
Should we tax the poorest of workers at all? If one of the main goals of taxation is decreasing inequality, why do we charge income taxes at all to workers earning below the average for example? You could argue that we need to remove money from the economy for macroeconomic purposes such as inflation, but then let’s do it from the richest and not the poorest?
Fun fact: you can tell your libertarian friend that the DPRK (aka North Korea) abolished income taxes in 1974. If they hate taxes so much, they’re free to move there!
Taxes bootstrap the value of the currency, and are a crucial inflation control mechanism.
The accounting connection between tax revenue and funding provided by a national government is entirely specious and imaginary.
OK, so every person should just stop paying them right now. What are they gonna do if we all do it ?
I wish.
I don’t necessarily disagree with your point. Organizing the working class in well-lubricated organizations with the common goals of improving the material conditions in which we live is something I applaud. However, I wouldn’t start tackling taxes first of all. Income taxes maybe, at most, account for 50% of your income. However, surplus value stolen from workers by companies is closer to stealing 80% of your income (depending on a lot of factors). Companies earn a lot more money from our labor than they pay us back, and I would argue for the abolition of this private employer - employee relation altogether. What do you think?
Also, cool username