Richard Murphy on tax, accounting and political economy
Tax Research UK Blog is written by Richard Murphy unless otherwise stated and published by Tax Research LLP under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
Design by Andy Moyle
Richard I have just read and enjoyed ‘The courageous State’. I am of the view that responsible citizens must pay their taxes as members of a community and it being their community they thus need to uphold and support it financially.
I see a fundamental problem however in a situation where the State legalises Fractional Reserve Banking [FRB] because this allows banks to produce new money that has no backing whatsoever in real goods and/or services. This is just legalised counterfeiting for which ordinary citizens would rightly be goaled. They would be goaled because counterfeit currency steals its value from the currency already in existence. We know it as inflation, thus siphoning off value from the cash holdings of ordinary citizens and in the case of FRB legally giving this unearned value to the banks. This is clearly a dishonest practice and where FRB is practised it fundamentally undermines the integrity of the currency. In my view a courageous state would immediately put a halt to FRB.