No, the central bank does not get money from taxes. That’s not how this works. That’s not how any of this works.
The central bank emits money that turns into inflation. On purpose. Because the only thing worse than galloping inflation is no inflation or deflation.
The way to not get galloping inflation is to not print crazy amounts of money.
Taxes are primarily there to fund the state (which has a much, much higher budget than what the central bank emits) and secondarily to discourage undesired behaviour.
Income tax is used because it’s super simple to collect, compared to e.g. a wealth tax or a capital gains tax which is more complex. Together with property tax and VAT (or other forms of sales tax) it’s the backbone of most tax systems because these taxes are simple to calculate, are simple to collect and are hard to evade. Also, they disproportionally affect lower and middle classes so the rich people in power like them as well.
spankmonkey@lemmy.world 1 day ago
The real reason is that the people who are wealthy and make their money off of capital gains wanted to use the idea of income tax being easier to avoid being taxed themselves.
squaresinger@lemmy.world 1 day ago
It’s a bit of both, surely, but it really is much more difficult to move employees, real estate and sales outside of the country than it is to move capital outside of the country.