Replacing Taxation With Money Printing Presupposes A Lot Of Things Politically And Monetarily

https://www.youtube.com/watch?v=MgIQFK2sxxY

Here's a brief explanation of what Modern Monetary Theory is all about if you haven't heard of it.

The idea of doing away with taxation sounds great until you realize that without a government in place, another protection racket would replace it. Even with all its faults, a modern government with some checks and balances is place is vastly preferable to a private form of government, i.e. a local gang. If the Russian experience in the 1990s when the government became effectively defunct for a few years is anything to go by, the gangs take about 30% without providing any services (except refraining from burning your shop down or something and preventing any other gang from doing so) like a democratically elected government does.

The only way to get rid of taxes is to have the government print all the money it needs to spend. Effectively, inflation would reduce spending power like taxation normally does. This is one of the key ideas of Modern Monetary Theory (MMT), according to which deficits are not a problem for governments that issue their own currencies.

However, this is not a workable solution except for governments that issue their own currencies. Currency unions would have to become full-on federal states. I'm pretty sure this couldn't be done in the euro zone since the countries in the euro zone are already very close to not being able to agree on anything.

Even powerful governments such as the US federal government or the Japanese national government would have to effectively set limits to the spending of state, regional or local governments unless they chose to continue to collect their own taxes. In most countries, and not even in federal states, local governments collect most of the taxes paid by individuals. An MMT like solution would end much of local sovereignty and centralize power to a large degree.

There's also the question of whether the government would allow for the use of private forms of money like cryptocurrency. For their printed fiat money to retain purchasing power, it wouldn't work if alternative forms of money were chasing after the same goods and services. The taxation of cryptocurrency income would probably continue or the use of cryptocurrency or any other alternative forms of money would be banned.

As much as I like the idea of ending taxation, I don't think it could be done without major downsides. What do you think?

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