• Pili@lemmygrad.ml
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    1 year ago

    Great video, I learned a lot. But I’m confused about taxes now, I don’t really understand why they are needed if a government can just make all the money it needs. Can someone explain like I’m a dumb baby?

    • TripleZ@lemmy.ml
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      1 year ago

      Taxes exist to give value to money. Basically, when a government prints money, that piece of paper has no inherent value. You can conduct your business in seashells if you so decide.

      However, at the end of the year, you’re going to want to convert your seashells into your government’s currency in order to pay your taxes. And that is what gives the currency value. The amount that is taxed depends on how much liquidity there is in the economy. If there’s too much money around, higher taxes would reduce that.

      This is a fairly poor explanation of how it is, you could read “Macroeconomics” by Mitchell, Watts and Wray for a more in-depth explanation including historical examples using “sticks” for taxes.

    • AfricanExpansionist@lemmy.ml
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      1 year ago

      They maintain demand for the currency. We can’t pay our taxes with anything but fiat. Bastards wouldn’t take my dozen head of cattle 😢

    • cayde6ml@lemmygrad.ml
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      1 year ago

      As far as I understand, taxes are used to finance services that capitalists refuse to provide, but more importantly, taxation is used to I think limit the supply of money. The government can print all the money it wants and nothing is inherently wrong, but that would devalue the currency. Be aware that I could be totally wrong.

      • davel [he/him]@lemmygrad.mlOP
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        1 year ago

        taxes are used to finance services

        I don’t think this part is the case, as explained in this video and in the 1Dime videos in this video’s description.

        Money is necessarily created by the government to finance goods & services first, otherwise there’d be no money to collect via taxes from those who the government (directly or indirectly) pays to provide said goods & services. There is no money except that which the government 1) creates itself or 2) creates through the private banks it deputizes to create money through the writing of loans (which always create them as a 1:1 credit-to-debt).