Why modern monetary theory fails without tax

Some people claim modern monetary theory (MMT) proves that tax doesn’t matter. They’re wrong. Tax is not about funding government spending—it’s about controlling inflation, creating demand for currency, and sustaining democracy. In this video, I explain why without tax, MMT collapses. 00:00 – Does MMT mean tax doesn’t matter? 01:05 – How government really creates money 02:20 – Why tax is still essential in MMT 03:35 – Spending, resources, and inflation risks 05:00 – Tax creates demand for currency 06:15 – Controlling inflation through taxation 07:30 – Beyond funding: other roles of tax 08:45 – Redistribution, market correction & cycles 10:00 – Tax and democracy 11:00 – Why without tax the economy fails TRANSCRIPT A transcript for this video is available at: https://www.taxresearch.org.uk IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. https://www.taxresearch.org.uk/Blog/2... HOW TO SUPPORT US Please consider donating: https://ko-fi.com/taxresearch ABOUT RICHARD MURPHY Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’. This video was edited by Thomas Murphy. RICHARD MURPHY ON BLUESKY: https://bsky.app/profile/richardjmurp... OR ON MY BLOG: http://www.taxresearch.org.uk/Blog/ HIT SUBSCRIBE & GET NOTIFICATIONS Subscribe and get notified of new videos released. INTRODUCTION:    • Welcome to my channel - Richard J Murphy -...   PLAYLISTS: The Wealth Series    • The Wealth Series   Ecenomics    • Ecenomics   Britain    • Britain   Tax    • Tax   MMT    • MMT   Money    • Money   Climate Change    • Climate Change   USA    • America and Trump   Labour    • Playlist   The Trump Administration    • Playlist   #richardmurphy #richardjmurphy #economy #economics #accountancy #accounting #tax #uktax #ukeconomy #greennewdeal #uk #money #economy #politics #government #tax #labour #health #life #ModernMonetaryTheory #MMT #TaxPolicy #EconomicsExplained #PublicFinance #FiscalPolicy #InflationControl #EconomicJustice #TaxAndDemocracy #StephanieKelton This debunks the common misconception that taxes don't matter in Modern Monetary Theory (MMT). Without taxes, MMT simply doesn't work, and the idea that governments can freely engage in money printing without consequences is false. Therefore, taxation is essential for the economic system to function as intended, ensuring effective government spending.