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358

Why aren't taxes not taken out right when it's created? That would end the moral hazard of tax dodging. You wouldn't have to spend money to stop tax dodgers. The IRS wouldn't need to exist.

Currency is taxed every time it's used. If you think about it, a percentage being taken out every event means the money has a limited life span. Is there a reason for this? Is it really just protection money to the government, is there a mathematical reason I'm missing, or is it something weirder?

Why aren't taxes not taken out right when it's created? That would end the moral hazard of tax dodging. You wouldn't have to spend money to stop tax dodgers. The IRS wouldn't need to exist. Currency is taxed every time it's used. If you think about it, a percentage being taken out every event means the money has a limited life span. Is there a reason for this? Is it really just protection money to the government, is there a mathematical reason I'm missing, or is it something weirder?

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[–] 0 pt (edited )

Taxing income based on percent is a 100% tax. You could literally put all the money in circulation into the government's hands within one single day with this kind of tax. Example -

At 30% income tax you would put $85 in the government's hand if you tried to exchange $100 only 5 times. FIVE times only $15 would be left in circulation.

Now if you're still asking 'Why would they do this tax' or you're glossing over my statement. THAT's why they do this tax. It's too complicated for 99% of the population to hold in their mind at all once.