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Author Topic: Why do we need to Tax?  (Read 4029 times)
Iseree22
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September 26, 2011, 07:48:21 PM
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Most Countries issue their own currency. If a country is able to issue its own currency why should it bother taxing the people to pay for services?? A country that issues its own currency could issue enough currency to pay for the necessary social services of that country. No Tax burden is needed to pay for the necessary public services.

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
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AyeYo
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September 26, 2011, 07:52:27 PM
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Not sure if serious...

Enjoying the dose of reality or getting a laugh out of my posts? Feel free to toss me a penny or two, everyone else seems to be doing it! 1Kn8NqvbCC83zpvBsKMtu4sjso5PjrQEu1
Iseree22
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September 26, 2011, 07:55:22 PM
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I am serious. Every modern country issues its own currency. So why does a country need to tax its citizens to pay for services???

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
AyeYo
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September 26, 2011, 07:57:39 PM
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Because they can't just print currency endlessly. Simple supply and demand says the more they print the less it's worth.

Do some reading in basic economics.

Enjoying the dose of reality or getting a laugh out of my posts? Feel free to toss me a penny or two, everyone else seems to be doing it! 1Kn8NqvbCC83zpvBsKMtu4sjso5PjrQEu1
Iseree22
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September 26, 2011, 07:59:22 PM
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So when should they stop printing money?

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
Anonymous
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September 26, 2011, 08:00:47 PM
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To enable a monopoly on force through coercive debt.
fergalish
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September 26, 2011, 08:05:54 PM
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Most Countries issue their own currency. If a country is able to issue its own currency why should it bother taxing the people to pay for services?? A country that issues its own currency could issue enough currency to pay for the necessary social services of that country. No Tax burden is needed to pay for the necessary public services.
In principle you're right.  They could just engage in inflation.  Print money to pay for state services, the money finds its way into the economy, inflation ensues.  As long as it's kept under control, it could work.  People just get really upset when they find that their money-in-the-bank has devalued by half.  Somehow, part-tax and part-inflation seems to be understood as more acceptable.  Watch "money as debt".
memvola
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September 26, 2011, 08:06:04 PM
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Because they can't just print currency endlessly. Simple supply and demand says the more they print the less it's worth.

Do some reading in basic economics.

Well, that is, in effect, taxation isn't it? At least it is what I get from Iseree22's proposal.

It is very practical but not the same mechanism. First off, if the State currency weren't used for taxation, who says it would have any exchange value? I would use a different medium to store my wealth, therefore avoid taxation by inflation. It's almost what's happening now to some degree, people who don't have enough to invest get taxed by inflation.
Boussac
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September 26, 2011, 08:08:58 PM
 #9

Printing money generates inflation: inflation is hurting primarily those who cannot invest.
Those who earn enough to save and invest can hedge against the effect of inflation for instance by buying a real estate property.
In short, taxes are a way to limit the gap between the rich and the poor.
The gap can be further limited if income taxes are progressive, not flat rate.

Iseree22
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September 26, 2011, 08:09:58 PM
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And what 'thing' other than the contraction of the money supply and velocity of money leads to deflation ?

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
memvola
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September 26, 2011, 08:24:05 PM
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You can also prohibit any alternative currency and investment method. That's what happens when the taxation system collapses. It was the case in the 80's in my country, my relatives were involved in foreign currency trafficking during that era, they smuggled US dollars in, hiding them in barrels of sand. Smiley Value was almost always measured in USD (and DM of course) and we were all millionaires in our State currency. Wink
AyeYo
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September 26, 2011, 08:53:03 PM
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So when should they stop printing money?

The central bank its constantly researching and studying that. There is no simple answer or concrete number.

Enjoying the dose of reality or getting a laugh out of my posts? Feel free to toss me a penny or two, everyone else seems to be doing it! 1Kn8NqvbCC83zpvBsKMtu4sjso5PjrQEu1
Sultan
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September 26, 2011, 08:55:55 PM
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So when should they stop printing money?

Most goverments have a central bank. They way money is printed is quite complicated. The government 'sells' bonds to the central bank for x amount. The central bank prints out the money and buys the bonds. The bank then waits for the bonds to mature and get their money back plus some interest.

The idea is that the government won't go crazy because the debt will be top high, and taxpayers pay off the debr. Such is the theory. That each unit of currency is backed by future work.

So the government can, in effect, print more money, but only at a huge cost.

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Iseree22
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September 26, 2011, 08:59:06 PM
 #14

So when should they stop printing money?

The central bank its constantly researching and studying that. There is no simple answer or concrete number.

The Treasury, not the central bank is the primary source of money. The Central Bank only swaps one form of money for another, and has little effect on real money supply(M0-M2), unless during times of crisis.

Is printing money to employ an unemployed person in productive work inflationary ?

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
AyeYo
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September 26, 2011, 09:01:39 PM
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So when should they stop printing money?

The central bank its constantly researching and studying that. There is no simple answer or concrete number.

The Treasury, not the central bank is the primary source of money. The Central Bank only swaps one form of money for another, and has little effect on real money supply(M0-M2), unless during times of crisis.

Is printing money to employ an unemployed person in productive work inflationary ?

The central bank sets monetary policy. The treasury just prints money.

Enjoying the dose of reality or getting a laugh out of my posts? Feel free to toss me a penny or two, everyone else seems to be doing it! 1Kn8NqvbCC83zpvBsKMtu4sjso5PjrQEu1
Iseree22
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September 26, 2011, 09:04:43 PM
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So when should they stop printing money?

Most goverments have a central bank. They way money is printed is quite complicated. The government 'sells' bonds to the central bank for x amount. The central bank prints out the money and buys the bonds. The bank then waits for the bonds to mature and get their money back plus some interest.

The idea is that the government won't go crazy because the debt will be top high, and taxpayers pay off the debr. Such is the theory. That each unit of currency is backed by future work.

So the government can, in effect, print more money, but only at a huge cost.

That is half right. Except a country that issues it's own money can keep rolling-over the debt indefinitely. When the debt falls due the country can simply issue more debt, receive cash from the market or the central bank, and then pay back the value of the debt. The current process is more complex than it needs to be. The amount of currency in circulation is proportional to the amount of National Debt, iff the Country issues its own currency.

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
Hawker
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September 26, 2011, 09:18:43 PM
 #17

So when should they stop printing money?

Most goverments have a central bank. They way money is printed is quite complicated. The government 'sells' bonds to the central bank for x amount. The central bank prints out the money and buys the bonds. The bank then waits for the bonds to mature and get their money back plus some interest.

The idea is that the government won't go crazy because the debt will be top high, and taxpayers pay off the debr. Such is the theory. That each unit of currency is backed by future work.

So the government can, in effect, print more money, but only at a huge cost.

That is half right. Except a country that issues it's own money can keep rolling-over the debt indefinitely. When the debt falls due the country can simply issue more debt, receive cash from the market or the central bank, and then pay back the value of the debt. The current process is more complex than it needs to be. The amount of currency in circulation is proportional to the amount of National Debt, iff the Country issues its own currency.


What you are missing is that a point is reached when the country can't get credit and its currency is not accepted. 

Iseree22
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September 26, 2011, 09:22:42 PM
 #18

So the central bank will never be able to purchase government debt in exchange for currency???

How is it ever possible for a country that issues its own currency to not have enough of that currency??

That is like saying to bitcoin miners; 'the only way you can mint more bitcoins is if you first purchase them from the market' under such a regime it would be impossible to increase the number of bitcoins.

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
Hawker
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September 26, 2011, 09:25:37 PM
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So the central bank will never be able to purchase government debt in exchange for currency???

How is ever possible for a country that issues its own currency to not have enough of that currency??

That is like saying to bitcoin miners; 'the only way you can mint more bitcoins is if you first purchase them from the market' under such a regime it would be impossible to increase the number of bitcoins.

This is so far off reality it's cruel. 


Iseree22
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September 26, 2011, 09:32:05 PM
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So the central bank will never be able to purchase government debt in exchange for currency???

How is ever possible for a country that issues its own currency to not have enough of that currency??

That is like saying to bitcoin miners; 'the only way you can mint more bitcoins is if you first purchase them from the market' under such a regime it would be impossible to increase the number of bitcoins.

This is so far off reality it's cruel.  



Why don't you post something with substance? Instead of relying upon immature replies to cover your lack of understanding.

 Learn how modern money really works.  (http://alturl.com/e4hu5) Ctrl-F : 1. What is Money?

How can a State(Country) that creates its own currency run out of Money?? It can't.
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