What is the point of taxation, as taxes are not needed to ‘finance’ spending? Taxes, at the macro level, serve to cause people to offer real goods and services for sale to get the thing needed to comply with tax liabilities. This allows the government to spend its otherwise worthless currency. So in this sense taxes are the very source of value for a floating exchange rate currency. The currency can be considered tax driven. Without taxes, the currency would have no value, much like Confederate $.