|Timely Income Tax Question: Why does a government that can print money (e.g., the U.S.) need to collect income taxes when it can simply print money to pay for its necessary expenditures?|
No one has ever given an answer to this question that made sense to me. And I don’t consider the answer that printing money would produce hyperinflation a good one.
Remember, the government would not be printing money without constraints but only enough to pay for necessary expenditures. And the limited inflationary impact of the new money printed would be substantially mitigated by a jump in productivity resulting from the elimination of income taxes.
Peace & good health,