"All money in circulation eventually goes into taxes" is interesting perspective, but I don't know if it makes sense on a state level. For a high earner, what percentage of their spending stays in California? I'd guess it's not very high. I tried searching, but didn't find any reasonable estimate.
This leads to the parallel question, how does this work on a national level? What percentage of American earnings stay in America, and thus eventually go to federal taxes? Probably a higher percentage, but still less than unity. But if we assume it all does, this leads to an apparent paradox: if all the money eventually goes to state taxes, how can all of it also go to federal taxes?
I'm not sure this is a helpful way to view what actually happens. What am I missing?
This leads to the parallel question, how does this work on a national level? What percentage of American earnings stay in America, and thus eventually go to federal taxes? Probably a higher percentage, but still less than unity. But if we assume it all does, this leads to an apparent paradox: if all the money eventually goes to state taxes, how can all of it also go to federal taxes?
I'm not sure this is a helpful way to view what actually happens. What am I missing?