@racuna Because printing money is EXACTLY the same as taxing, except you have to use more paper every time.

The good thing about printing money is that the inflation it causes is an equal tax that is based uppon the money owned, but it cannot be turned into a progressive tax AND increased inflation decreases trust in your currency, causing decrease in investments and economic growth.

Yeah, I am writing a test on this shit in 4 days, why do you ask?

@LukeAlmighty If you have a bakery and then you buy shoes. Those shoes were bought with "bread" (money is just a tool here). And that money is backed by real work.

When they print money, that money is not backed by work. This cause inflation because is like putting water in the wine. You have more wine but diluted.

With taxes, the gov are taking your money by force, and that money is backed by your work. Real money.

Both, taxes and printing are both a bad shit, but I don't think they are the same.

@racuna No, they are not the same, but they do have the same effect of wealth transfer.

The wine analogy is actually quite perfect. You need to collect 1/2 a glass of wine from the people. If you take 1/2 of the single glass the people have, you both have 1/2 glass of wine and the wine remains pure.

On the other hand, if you add 1l of water, mix it and both sides keep 1l of deluted wine, you have colected 1/2 l of "value" while the people still keep their 1l of wine.

The transfer of value can be done through money printing. The inflation is just an indicator of how much of the transfer did happen. Saying there is a difference is just a semantics at that point, since the value transfer did occur in the same way as if the money were collected.

@LukeAlmighty Maybe, I'm trying to understand your point. Because when you print money, you are affecting all people's money, 'cause even their savings will have less purchasing power.

With taxes I don't think this is true. Or at least, in every case.

@racuna Yes, you are right. The purchusing power of your money will not be affected by taxacion. BUT you will have less of these money, meaning you will end up the same way.

The point of taxes is to collect a purchuse power. There are two ways of doing that. Either you collect money of that value, or you print so much money, the decrease of all money will be in total decreased by that value.

My point is, that printing money is a legitimate (and used) way of collecting taxes. The fact it causes inflation is just another phrase meaning "they are taking my total purchusing value". But that is the entire point of taxes anyway.