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For the state/provincial and local taxes described in this diary, a third view is that taxes are pooling individual resources to achieve ends that cannot be achieved individually.

However, all three ethical views fall apart at the level of the currency authority, because the government at the level of the currency authority can spend its own IOU's, so taxes are not needed to "finance" spending ... rather, they are needed because the issue of new fiat currency at the level consistent with national spending needs would destabilize the value of the fiat currency and undermine its ability to act as a store of value.

Therefore, taxation at the level of the currency authority is required to protect the ability of fiat currency to act as a store of value, and to protect the ability to write financial contracts that rely on the presumption that state-enforceable contracts can be written in terms of some asset that can act as an effective form of money.

Of course, for multi-state fiat currencies monies like the Euro, it implies that the nation-state lapses to a certain extent back to the public finance status of a province, and there is an institutional lacunea if there is no fiscal authority attached to the region of the multi-state fiat currency.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat Feb 28th, 2009 at 01:25:57 PM EST

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