quetzalcoatl wrote:One of the purposes of taxation is to extinguish money.
Taxation doesn't extinguish money. It just transfers it from the taxpayer to the government.
Why would you want to extinguish money? To reduce inflation, when there is too much money chasing too few goods.
But if you look at actual inflation reduction, as in the early 1980s, there was no reduction in government spending. So you're wrong.
You can also extinguish money by reducing the spending of the sovereign; these two actions are functionally equivalent in their effect.
Neither extinguishes money.
Conversely, when there is underemployment and productive overcapacity (slack in the economy), you would want to create money. This is done by some combination of reducing taxes or increasing spending.
Neither action increases the money supply.
From a nation-state perspective, the primary purpose of taxation is to create demand for the national currency (in which taxes must be paid). Taxation has some additional lesser functions; breaking up concentrations of capital, and discouraging rentier income investment.
Modern Monetary Theory (MMT) understands money somewhat, but does not understand taxation at all. The purpose of taxation is to transfer purchasing power from the taxpayer to the government.
Some relevant concepts:
1) Taxation does not fund government spending of a nation with monetary sovereignty. (The UK has monetary sovereignty, Greece does not)
False. Any transfer of purchasing power from the private sector to the public sector funds government spending.
2) It is not functionally necessary to issue debt, when sovereign spending exceeds tax income. We do this as part of legal or functional arrangements, which are themselves holdovers from obsolete "sound money" theories.
It is true that instead of issuing debt, government could issue money. But they are two different actions, with different effects.
3) Governments create money by reducing taxes or by spending.
No, they do not.
In the private sector banks create money by lending to individuals.
Or to firms or governments.
Monetary operations of the Central Bank has a very limited effect on the money supply. Thus individuals who equate QE with 'running the presses' are either demagogues or severely misinformed.
Speaking of which...
4) Money cannot be both a measure of value and a store of value.
It is self-evidently both, as a result of its basic function as the medium of exchange. However, its usefulness as a store of value over time depends on monetary policy.
These are basic category errors. The 'value' of money can never be fixed, since the quantity of money and the supply of goods are constantly changing in reaction to market forces.
And non-market forces. It is a category error to claim anything is a better measure of value than money, as value is by definition what a thing can be exchanged for, and money is by definition the medium of exchange.
5) A gold standard will never again be instituted in any major economic entity. Period.
Never is a long time, but that is probably true.
If you carefully work out the implications of these concepts, the clouds will be lifted from your vision.
Cast out first the beam that is in thine own eye.
As regards to taxation being theft, yeah okay. So what?
There are some "taxes," such as a land value tax, that consist of voluntary payments for benefits received, so they are not theft.