In Modern Monetary Theory, state-backed money ("fiat currency") loses value with every taxable transactions it's used for. The missing value is extinguished by tax.

So the more a dollar is used in a year, the faster it evaporates out of the money supply. If we can, we'll want to save state-backed money, ie prevent it from being used for transactions, to hold its value.

Demurrage is the opposite of taxing transactions. It taxes money while at rest, so we want to spend it.

#tax #demurrage #MMT