Here let's make it more depressing about how the system actually works,
the government prints money because it does not have any money of its own and then it collects taxes to attempt to keep down the level of debt from getting too high.
So in reality, your tax dollars are not at work but actually more like making the lowest payment on a VISA card.
Remember before you cut me off because you have a economics background. I was talking about Keynesian economics being the most widely accepted then specified even more by saying it is what governments are actually using.
To save time you have to go look at deficit spending and how government spending drives and influences an economy.
Government creates money. Taxes are their way to create demand for the money they create. A good example and to keep it brief was early America prior, during, and post the Revolutionary war. America used different currencies the Spanish dollar also known as piece of eight. Also used was the French franc not as heavily but in areas that were part of the previous French colonial empire. They used Dutch Lion Daalders also known as dog dollars and where we get the name dollar from. As well as we used the pound.
The Spanish dollar and the English pound were the most widely used. So how do you create demand for any currency you want to use for a medium of exchange. You create a tax obligation in a specific currency creating a demand for that currency so that people can meet their tax obligation.
Money is created by demand 90% of money is created by credit. You go to the bank and say I want to buy a house. The bank creates a IOU a credit for the amount. Which when it creates it they create a asset and a liability. An asset because they hold an IOU and a liability because they have to deposit the amount into your account. Same for the individual it also becomes an asset because now they can spend the credit in their account and a liability because they have to pay it back.
Same with government as individuals an asset and liability. Government when they borrow or create money their liability is auctioned off. It is sold as bonds. Bonds can be callable what that is say company x wants to build a new factory to produce more widgets to sell because the demand for widgets is greater than their ability to produce them. So company x will sell bonds to raise the capital to build. Their bonds will be callable in other words if demand for widgets is great. They will call in their bonds before maturity or pay you back your principal before maturity. They do this to save money by paying less interest on their bonds by calling them before maturity.
Government does not do this as they are competing in the market place for money. So their bonds are not callable you will earn the interest known as the coupon during it's lifetime. Then at maturity you will be paid back your principal amount. Along with their ability to pay the interest and principal. Their bonds also being noncallable is a big selling point to buying them.
So taxes don't directly go to paying back the debt it is used more to pay the interest on the debt. Recall in a earlier post you had posted a tweet about Treasury doing a buyback. This is where this comes into play they can buy back debt and reissue it at a lower interest rate or buy it back to ensure that different issuances have the same maturity date.
So for example lets take the tariffs. You can make it so that a certain amount of debt comes due on the same maturity date and then is retired using the money from the tariffs. Since you know when you will receive the tariffs you set the maturity date to coincide with the date you collect.
However, this will never happen because the world's current financing model is government deficit spending. So government debt is paid off buy borrowing. This model is supposed to create an aggerate greater demand which in theory should create jobs and stimulate private sector activity. However, it has been the opposite as it makes government grow and does a poor job of creating new tax revenue. For example government will create a job then say pay the person a 100 dollars then tax that person 15 dollars.
So anyway why I have in prior post advocated for trying a new economic model instead of continuing to do what we and the rest of the world have been doing since the 30's which is just not working.
I hope this makes sense as I tried to keep it as short as possible but was still longer than I had hoped..........LOL