Reaper wrote:What an absurd post. Why does any government even collect taxes if it “doesn’t need your taxes to fund spending”.
Article by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, written in 1946
TAXES FOR REVENUE ARE OBSOLETEIn this article, Ruml outlines the various uses/purposes of taxation.
Raising revenue is not one of these reasons. Sorry if this sounds smug, but facts is facts.
Or you can do this simple thought experiment. If I have a printing press and I have the exclusive right to print dollars, why do I need more of these dollars from you?
The US government does not "use" dollars; it creates dollars. Every time it needs to spend, it creates more dollars. This is literally how it works, at the basic mechanical level of monetary operations. This is the real world meaning of the US being a currency-issuer. Yes, taxation IS necessary, but not for government spending. I know this offends many people's assumptions about the rightness of things, but facts is facts.
But to answer your question directly, the purposes of taxation are:
1) To establish a demand for the national currency. You must obtain dollars to pay taxes. A slightly different way of stating this is taxation exists to create unemployment. (This is what British colonial authorities did in Africa. They created scrip currencies and forced colonial subjects to pay taxes in the scrip. The object was to create unemployment - that is, force them to work in order to pay taxes. The authorities didn't need the scrip; they just needed a way to compel work.)
2) To control aggregate demand, as a way of controlling inflation. Taxes function as a demand drain, by removing purchasing power from individuals and firms.
3) To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes. (This is used to break up concentrations of wealth. Or, as in the case of the Trump tax bill, to magnify concentrations of wealth)
4) To express public policy in subsidizing or in penalizing various industries and economic groups. (for instance, taxes on cigarettes and alcohol, or a carbon tax)
The old world is dying, and the new world struggles to be born: now is the time of monsters. -Antonio Gramsci