The notion of tax-driven money is easiest to understand in relation to an exogenous tax such as a property tax or simple head tax. Demand for a state money is most effectively driven by exogenous taxes, not endogenous ones such as income taxes. Even so, in a hypothetical system with a tax imposed solely on income, the tax would still drive demand for a state money. It is worth considering why this is the case, because it also indicates why some level (but not any level) of a basic income would also be consistent with currency viability.heteconomist
Currency Viability In a Pure Income Tax Regime With a Basic Income
Peter Cooper
3 comments:
If you create a brand new country from scratch, you need something like a head tax to provide a base of measurement for the unit of account. (Randall Wray's book "Understanding Modern Money" discusses how colonies were brought into monetary systems, and they used head taxes to bring "utility in line with the unit of account" (as a mainstream economist would term it).
The problem largely disappears once a web of nominal contracts is created; people have fixed liabilities in relation to the unit of account, and so price inertia sets in. So for a modern economy, taxes purely based on nominal activity will work.
Doesnot matter ... if the banks usurp control of your so called sovereign currency and "print" it in secondary markets of derivatives then you are toast ... then the banks have it made with qe, standard monetary base expansion, and all that. There are zeroes to be had!!!
Austrians are super way off even more.
You cannot deflate away nada zilch if the banks are inflating with derivatives your currency and gutting pensions
For benefit of their doubly rigged game.
MMT is always framing things in terms of indirect taxation in clever indirectness - the hook for those concerned about excessive taxes.
We are being taxed by the derivatives markets wielded by the banks who are using the default swaps as a form of currency printing unregulated and misunderstood.
We should be taxing the derivatives and not being taxed by the derivatives in the form of higher home prices higher food priced higher interest rates then higher composite margins libor sucky customer service. ..
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