I posted this video this morning on a theme familiar to many here, I suspect:
If the link does not work, it's also here.
The transcript is:
There are six reasons why we need taxes.
The first and most obvious is to control inflation. As I've explained before on this channel, every time the government spends, it creates new money to do so. It borrows it from the Bank of England, it spends it into the economy to deliver on its policies, and then it has to tax to bring that money back out of the economy under its control, when it cancels it. Literally. It puts it out of use.
That's the biggest reason why we tax, but there are five other reasons as well.
The second one, many people think is a little obscure, but let me make it clear. Unless we did have tax, and unless we had to pay it using the currency that the government creates - the pound in the case of the UK - then that pound would not have value.
Because the government requires that taxes be paid using the pounds that it creates, to fulfil the promise to pay that it prints on banknotes, and which are implicit. in all its electronic spending, then unless it takes those pounds back in settlement of tax liabilities, it couldn't require that our pounds be used for all the transactions that we undertake in all our shops, in all our trading, and everything else.
And it is that requirement that we pay tax that gives the pound value in exchange, which therefore makes it useful as a currency. So, tax creates the value of the pound.
Then there are other reasons why we tax.
First, there is inequality in the UK. Inequality of income and inequality of wealth. Tackling those becomes the third reason why we tax. Tax is used as an instrument to reduce inequality in the UK.
Next, there are market failures in the UK, because people are addicted to alcohol and to tobacco, and they overuse carbon, which has a massive cost to society, and so on. The government imposes taxes on these ‘bads' to prevent us over consuming them, and, as the result, tries to reduce the impact of these things on society as a whole.
Then, there is something called fiscal policy. We've just talked about the ‘bads'. Fiscal policies are the ‘goods', the things that the government wants to encourage, whether it be investment, or education, or healthcare, it can use the tax system by lowering the rate of tax on people who do these things or supply those services, to therefore encourage people to actually deliver goods for the benefit of society.
And finally, the sixth reason to tax is that tax represents a social contract between us, the population, and the government. In that social contract, there has to be what is called, in legal terms, a consideration. Something that represents the payment between us. Well, tax is the consideration in the social contract, and because we have to pay tax and therefore have a relationship with government, we're interested in what government does.
And there's quite a lot of evidence that people who pay tax, vote. That's why more people vote in general elections than do in local elections, for example, because council tax is not nearly so significant a tax as income tax, VAT, national insurance, and the other taxes that we pay to central government. So, we literally tax to encourage people to partake in our democracy.
Six reasons to tax. None of them to fund the government, all of them to deliver social benefit. It's a pretty good thing, this tax.
That's why I once wrote a book called ‘The Joy of Tax', because it is what literally shapes our society.
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Without the issue of currency and the guaranteed “promise to pay”, and the power to demand taxation the ‘sovereign’ would not be sovereign. It is more fundamental than democracy; because these are necessary (but not sufficient) conditions for sovereignty to exist.
Accepted
I should expand that argument
Indeed the inter-linkage between state creation of money and its taxation of this money is the goose that lays the golden eggs for human beings!
Richard…..just expanding my thinking on this, with inflation still rampant in the supply of food how can taxes remedy this without damaging the most vulnerable in society?
Do you think increasing interest rates helps?
Or should we instead be taxing for redistribution to face a new reality created by climate change and Brexit?
Taxes properly and fairly applied can remedy this.
It’s describing America, but is here much different?
https://robertreich.substack.com/p/why-are-food-prices-out-of-control
Always worth repeating this. Eventually it will get through.
You can, if you wish, pay your taxes in euros.,
https://library.croneri.co.uk/cch_uk/btl/taxbull-it-taxbull-tb02-99-9
You can’t
You can pay your sterling liability, with the euros being required to be exchanged to do so
There is never a euro bill settled in euros
You live been able to pay your taxes in Euros for over 25 years.
You’re just 25 years behind the facts, as usual.
I doubt you even read the link provided above as you’re too arrogant to believe you might be wrong.
Go on, prove me wrong!
I answered the point, precisely
The bill is in sterling. Of course you can exchange the required number of euros into sterling to pay it.
‘ Taxpayers who decide to use the Euro in their businesses will be able to pay their tax and National Insurance contributions in Euros from 1 January 1999.’
QED
Exchanging the funds into sterling on the way -as the liability is determined in sterling. Of course they can exchange their euros to pay. How hard is this to understand?
I can use my pile of gold bullion to pay my tax bill. It still has to be converted to Sterling first though.
I did see a painting in the Tate Gallery that was taken as payment for an IHT bill.
But only because it had a sterling value attributed to it
You do attract a lot of trolls!
Oh yes….