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1/ Every dollar of federal spending is, and has always been, paid for with created currency. This logically extends to "federal taxes don’t – and can’t – fund federal spending."
Federal taxes are still critical to our society.
#LearnMMT [THREAD]
Federal taxes are still critical to our society.
#LearnMMT [THREAD]
2/ Overview: Federal taxes:
1. "Drive money." (People must do as asked, in order to get money, in order to pay taxes. Otherwise they go to jail).
2. One of many tools for controlling inflation.
3. A way to impose moral decisions (higher to discourage, lower to encourage).
1. "Drive money." (People must do as asked, in order to get money, in order to pay taxes. Otherwise they go to jail).
2. One of many tools for controlling inflation.
3. A way to impose moral decisions (higher to discourage, lower to encourage).
1. Federal taxes "drive money."
The value of the dollar does NOT come from "the full faith and credit of the United States government." It comes from the fear and avoidance of severe penalties if one does not pay their federal taxes in the US dollar. neweconomicperspectives.org/2011/07/mmp-bl… 3/
The value of the dollar does NOT come from "the full faith and credit of the United States government." It comes from the fear and avoidance of severe penalties if one does not pay their federal taxes in the US dollar. neweconomicperspectives.org/2011/07/mmp-bl… 3/
2. Federal taxes are one of many tools to control inflation. When there’s too much money chasing too few goods, taxes can be increased to reduce that purchasing power. For #MMT scholarship on inflation, search for "inflation" and "[I*]" on this page: neweconomicperspectives.org/mmt-scholarship 4/
6/ (The most important tool for controlling inflation is the Federal Job Guarantee, which would prevent much of it from ever occurring.) pavlina-tcherneva.net/job-guarantee
3. Federal taxes also impose moral decisions, where "morality" is as defined by society. We could increase taxes on gas guzzlers to discourage use of fossil fuels, or decrease them on solar panels and electric cars to encourage their use. 7/
8/ We could also decide that our obscene wealth inequality is immoral and increase taxes on the super-rich. This *indirectly* redistributes wealth by making the *existing* wealth of the many more valuable.
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