Abstract

To what extent an economy needs taxes? Considerations show that taxes are strongly tied to specific way of economic thinking not quite right. Correct conceiving of the fundamental economic categories: capital, labor, and money as abstract, intellectual notions open a new perspective for economy. Then discloses a fact that labor creates money i.e. labor is financing on its own. Therefore, economy does not need taxes in order to finance labor of employees. Taxes are only needed for assets financing. It is natural in companies and it is true in the public sector as well. A material perceiving of the capital and labor is the reason of severe taxes, budget deficits, and it damages an image of money economy as a magnificent achievement of humanity.