Taxes Without a National CurrencySubmitted by nothappy on Sat, 10/26/2013 - 03:24
OK DPers -- this question has been on my mind for a long time, and I've never found a satisfactory answer. Maybe you can help.
How can taxes be paid in a country that has no national currency?
That's a general question, but I'm thinking more in the context of the United States. If we did allow for monetary competition in America, how does the government collect taxes? Does everyone send gold bars to DC via the mail? Does the government just blindly accept every "Joe Schmo's Notes" at face value?
We didn't have a national currency for most of the free banking era. But we still had taxes. Excises, imposts, etc. were still getting paid. Before the Homestead Act the feds were charging for the purchase of federal lands. Did they just accept any state or private currency? What happened if the bank went wildcat, as did happen somewhat frequently?
EDIT: And if the solution is that you just allow the market to set the exchange rate between various currencies, what currency does the government use to set your tax bill? And then isn't that currency basically a national currency?