Revenues vary with the economy

There are multiple things wrong with this claim, but the most fundamental, I think, is that it represents a remarkable misunderstanding of the reasons why we have taxes in the first place.
In his latest blog, Paul Krugman continues his blogging battle with the MMTers.Quote: Steve Landsburg asserts that you can’t tax a man if you can’t persuade him to reduce his consumption. They don’t primarily exist as a way to induce lower private consumption, although they may sometimes have that effect; they are there to ensure government solvency.I agree with Krugman that taxes do not "primarily exist as a way to induce lower private consumption." In fact the government can only set the tax code and tax rates. Tax revenues vary with the economy over which the government has little control from one year to the next. In any case, taxation is subject to much political compromise and is a blunt tool at best for controlling private consumption.The primary function of taxes is to create a demand for the government's fiat money. Taxes are needed to limit government debt relative to the national income, although the upper limit is well above the current level. Krugman is quite mistaken when he asserts that taxes "are there to ensure government solvency." There is never an issue of solvency when the government's debt is denominated in its own currency, as it is in the US.
Consider first the taxes raised by, say, the state of New Jersey. Chris Christie doesn’t tax me because he wants to reduce my consumption; he taxes me because NJ needs money to pay its bills. It’s true that in the short run, if we ignore the legal restrictions on state borrowing, he can spend more than the state takes in in taxes; but over the longer run the state must, one way or another, collect enough revenue to pay for its spending.True, but irrelevant. The focus of MMT is on the national government and its currency.
Does the same thing hold true for the federal government? Well, the feds have the Fed, which can print money. But there are constraints on that, too — they’re not as sharp as the constraints on governments that can’t print money, but too much reliance on the printing press leads to unacceptable inflation. (Cue the MMT people — but after repeated discussions, I still don’t get how they sidestep the issue of limits on seigniorage.)Krugman misunderstands the MMT position here. MMT people do not sidestep the issue of limits on seigniorage. They have clearly stated that unrestricted printing of money will lead to unacceptable inflation. Their basic point is that government deficit spending creates non-government financial wealth, and deficits are non-inflationary up to the point of nearly full employment.
So taxes are, first and foremost, about paying for what the government buys (duh). It’s true that they can also affect aggregate demand, and that may be something you want to do. But that really is a secondary issue.It is certainly true that the government cannot simply print the money it spends without its leading to runaway inflation. Taxes help pay for what the government buys, but a government deficit is needed on average to increase the financial wealth of the private sector consistent with a growing population and economic output.
And may I say that now is an especially peculiar time to think that taxes matter only if they reduce consumption. We have lots of excess capacity in the economy; the government can easily buy more goods and services without requiring that the private sector buy less. The only reason to raise taxes now, or promise future rises, is to address solvency concerns.MMTers do not advocate raising taxes now, and certainly not to reduce consumption. So I don't understand what Krugman is getting at here. Discussions like this really disturb me; they indicate that there are a lot of people with Ph.D.s in economics who can throw around a lot of jargon, but when push comes to shove, have no coherent picture whatsoever of how the pieces fit together.