Is It Time To Abolish Taxes?

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Introduction

Modern monetary theory (MMT) is an approach where public expenditures are covered by printing money and not by collecting taxes. Many have argued, including @edicted here on LeoFinance, that the current tax system is unjust because it allows for the wealthiest individuals to skirt their taxes in many different kinds of ways, leaving the burden to the average person to bear. He has a good point. I would add that the tax system is very complicated and implementing it requires running expensive bureaucracy as well as it being a major headache for businesses and individuals to calculate their taxes. Non-compliance is a significant problem, leaving the compliant with a bigger bill.

Many people, including mainstream economists, are in opposition to such an idea. The fact that governments are required to collect taxes to fund themselves helps keep them in check and growing uncontrollably. If taxes were abolished, governments would be funded through inflation, which would devalue money held by everyone.

Modern monetary theory is the new reality

Governments around the globe running large and persistent deficits and central banks being forced to print money to keep interest rates from skyrocketing is modern monetary theory through the back door. This is to a large degree the new reality. This had led to the debasement of money not so much visible in consumer prices but in asset valuations. Despite bad economic times, there is a bull run in equities. Crypto-assets are an emerging asset class and money printing is the macro narrative that makes up their value proposotion.

For MMT to work, government monetary monopoly is required

But for MMT to work, a public monetary monopoly is required. If governments stopped collecting taxes and printed all the money they needed, wouldn't that just lead to the mass adoption of non-government money to get away from the inflation? I think that's highly likely. How would governments get funded then if fiat currencies didn't even have being the only currency in which to pay taxes to back them up? Governments could not control decentralized monetary protocols. Would they try and regulate them to death or to outlaw them - or to tax them aggressively to maintain their monetary monopoly? I'm afraid that would be a real possibility. On the other hand, legal tender being the only currency in which to pay taxes is not the only thing that makes legal tender special. A creditor is forced to accept legal tender (fiat in this case) to as repayment of a debt or else the debt is legally null and void. Also, according to legal tender laws, those entities that have an accounting obligation are forced to use legal tender as the unit of account. These two aspects of legal tender would still remain in addition to fines being payable only in legal tender even if taxes were abolished.

Conclusion

As tempting as it sounds, I don't think ending taxation would necessarily do crypto any favors in the long run. MMT relies on a government monetary monopoly. Crypto-assets are all about ending that. Particularly dangerous to governmet monetary monopoly are stablecoins, which are exactly what central banks have been most wary about as they realize cryptocurrencies are not viable as payment networks due to their immense volatility.

I'm interested in hearing your thoughts.