I understand this part of MMT: From 100 USD that the Fed prints, the state can get back (or destroy) 10 - 90 USD back in taxes. But what is the effect of taxes on the economy:
- A household buys food for 50 USD incl. 10% tax - what is the effect of the tax here?
- A private person buys a luxury item of 80 USD with 25% tax - what is the effect of the tax then?
- A foreigner buys the same luxury item of 80 USD but requests tax free discount (as he has an account on the Bahamas ) - how does tax discount and avoidance show up in MMT ?