Did you know: the role commercial bank money plays in the fiat economy is a major reason governments are reliant on income taxes?

When money is produced as cash by the central bank, it is sold to commercial banks at face value, who must then pay the full amount to the treasury. This process is called seigniorage.

In other words, cash provides state funding by charging banks to supply them with currency, meaning the gov can generate revenue without taxing the people.

Don't get me wrong, this is still a poorly incentivised system overall as it encourages moving from sound money to fiat to increase revenue, and the resulting inflation is simply a stealth tax (aka theft) but it's one reason we were able to function just fine without income tax in the past.

It also is still a perfectly fine system so long as it's only used to produce convertible commodity money. But this must be strictly enforced.