[kelseyfrog]

In practice the reason taxes are not used to combat inflation is purely a political one - it's much more difficult to convince voters to raise taxes to combat inflation even if they are the one's complaining about it.

Take an extreme example - one could take a portion of their income convert it to bitcoin and then destroy the wallet's private key. If people did this en mass, it would be like burning money to reduce inflation. The only thing stopping people from doing this today is the social cooperation that it would take to accomplish it in spite of the game theoretic solution we find ourselves in today.