Post #4056716

You could look at your tax bill like this... The government creates all money (either directly by spending or indirectly through the banks it licences). All of this money is created out of nothing - it's just 'IOUs' written by the government - which is why UK bank notes always had printed on them "I promise to pay the bearer on demand". The money created by banks when they make loans is cancelled - destroyed - when the loans are repaid. The money created when the government spends is destroyed when the government collects it back in tax. Tax does not pay for government spending - it's the other way round. The government doesn't collect back in tax all the money it creates (and of course bank loans don't always get repaid) - this is the money in circulation, savings, etc - and it's 'the national debt' - the difference between the amount of money the government has created and the amount it has destroyed. Public debt IS private wealth. If the government doesn't destroy enough money - ie. doesn't tax enough - there will be too much in circulation, and it's value will fall - that's inflation. So when you pay tax, you're not funding anything - you're protecting the value of the other money you have. Does that help ? By the way, all this is not just a way of looking at tax - it is in fact all true (if you live in a country with its own currency, or in the eurozone, which has shared euro ownership).