Tax does not fund spending

Most people think tax pays for government spending. It doesn’t. In a modern monetary economy, governments that issue their own currency spend first and tax later.

In this video, I explain the six real purposes of tax:

• ratifying the currency
• controlling inflation
• redistributing income and wealth
• repricing harmful activity
• strengthening democracy
• organising the economy for public purpose

Understanding this changes everything about austerity, social security, inequality and public services.

If we want a politics of care instead of a politics of fear, we need an honest debate about tax.