How taxation should be understood

  Historically, taxation was a necessity because it was the only way the state could acquire revenue for government spending. With the advent of Central Banking, taxation is no longer necessary. The government, save for local offices, would not need money from its citizenry. It would simply acquire the revenue needed through fiat.

  In a way, many governments around the world have already realized this considering how they run budget deficits continuously throughout the decades. However, they are still stigmatized by thought of no taxation. Perhaps it is due to some kind of classical mess. So the goal is simply to print or spend more money than they collect in tax revenue with the stated goal that they will collect enough tax some day, although they never do.

 How the tax system should really be applied is the same way Central Banks set interest rates. To encourage or to discourage spending. Setting high taxes discourages people to go out and spend thus helping to slow inflation. Lowering taxes help encourage people to spend thus helping to increase inflation but also to boost economic growth.

 Taxes can also be applied to set social policy. Engineering the populace to engage in one behavior, but not the other without being too heavy handed.

 With Central Banking and Legal Tender being the norm, the need for tax revenue is largely archaic and unnecessary except to promote social and economic goals through monetary engineering.