this post was submitted on 07 May 2025
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Tax absolutely does destroy money. You think the government has a bank account they collect tax dollars into? Taxation is one if the ways that the government removes money from the economy, and hence controls the amount of money in the economy.
Do you think there is a fundamental difference between you spending $20 at the grocery store vs the government spending $20 (through EBT/SNAP/WIC benefits) at the same store?
The only difference is how the money gets accounted for, it's still circulating through people's hands. It doesn't just magically cease existing because it was collected via taxes.
There is a fundamental difference. If I want to buy $20 worth of stuff from the store, I need to have $20. The government just spends it, creates the money out of thin air. And it does, litteraly go back to thin air when the government takes it back. The is fundamental to the way the economy actually works - if the government had to actually physically have the money in an account in order to spend it, spending would become massively problematic and unweildly.
I don't think you understand "the way the economy actually works" if that's your take on how our money works and how govt spending works.
Also, if we're talking about the USA, every state has some legal provisions regarding a balanced budget (except maybe VT?). So the state governments do account for having the budget balanced>
You're right we run deficits in our budget but that doesn't mean there isn't debt being accounted for. You're basically saying that our money magically ceases to exist when it's collected as tax and that's just wrong full send.
Ok, I will admit that I am not an economist..
We've been deficit spending most of my life. That money, and then some, is going back into the economy.
What it does is make the middle class poorer and whoever the government gives it to richer.
Right, and deficit spending proves my point. The government spends money that doesn't exist. They don't collect taxes in April, count it all up, see how much they've got, then work out the deficit, then create that much extra money. They spend what they want/need to spend, then remove excess from the economy with taxes.