[Schiendelman]

It's not necessarily obvious that tax rates can be too low. If you're a government and you issue the currency, you can get much of the same outcome as taxation by printing the money you need to spend. What you don't get by doing that is natural redistribution the way graduated marginal rates give you. You have to spend to redistribute.

[inigyou]

You get too much inflation that way. Taxation is a mechanism of destroying currency to cause deflation to offset the inflation caused by government spending.

[Schiendelman]

I'm not sure any currency gets destroyed. We run a deficit anyway.