Abstract
Few people really appreciate that the state has no money of its own. The money it has in its Treasury comes from two sources: taxation and the central bank’s printing press – in other words, inflation. The first is the object of the government’s fiscal policies; the second, that of the central bank’s monetary policies, as well as of the politicians’ pressures. The two correlate because the difference between the money the government gets through a reasonable level of citizen taxation and its unwisely assumed huge commitments – from entitlements to foreign aid and military expenditures – is made up by the printing press, as well as by increases in all sorts of taxes. ‘We must tax the poor,’ André Tardieu, a French radical socialist prime minister, said in 1930. ‘They are the most numerous.’ Indeed, so it is. Value added tax (VAT) picks up a hefty share of private money for the government and it is paid by both rich and poor.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Copyright information
© 2011 Dimitris N. Chorafas
About this chapter
Cite this chapter
Chorafas, D.N. (2011). Fiscal Policies, Spending Policies and Conflicting Aims. In: Sovereign Debt Crisis. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9780230307124_6
Download citation
DOI: https://doi.org/10.1057/9780230307124_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-33456-8
Online ISBN: 978-0-230-30712-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)