Your government has things it has to do. It's supposed to put cops on the street to make people safe, fill potholes in roads, ensure the pensions of the elderly, organize the education of the People's children, and ensure a basic level of health care as at least a last resort. Doing this takes people to do those things, and the materials they need to do those jobs.
"Well, no duh, right?" I'm sure you're saying to yourselves. "I'm sure the next thing he's gonna tell us is that we pay taxes to pay for those things, like that's some big revelation." Well, yes, but not quite. It turns out the story's quite a bit more complicated than that. Follow me below the squiggle thingy and I'll explain why
Historically, your government was your king, or your local lord, or your great uncle, or a council of elders, or whatever. When they decided to do something like the above, they told people to do it and told other people to give them the things they needed to see it done. If you didn't do what they told you, or give what they told you, you got beaten, or exiled, or killed until you did.
They started paying these people because it goes down easier when you're forcing someone to do something they wouldn't otherwise be doing, if you make them a little better off for doing it than they would otherwise have been. Plus, you get people competing to provide these goods and services to the government, instead of trying to avoid it, so the stuff the government needs done is done as well as can be. In order to do this, they had to take even more stuff from more people, or pay from the government's property.
That's what taxes really are, people's time and real resources being used by the government for its purposes, when they would either a) have not been used otherwise, or b) would have been used by some other private actor for some private purpose, and the additional resources used to compensate those people for their use. Your monetary system doesn't matter, and cannot change this underlying truth. It doesn't matter that the government has taken complete control over the monetary system either, in that it is a fiat currency, nor that it only any longer collects taxes in the form of US dollars and spends dollars to buy the things they want. A monetary system, whether based on a fixed exchange with some commodity or a fiat system based on the value and amount of carried debt, is simply a social fiction that allows greater flexibility and efficiency in administering the distribution and use of real resources, nothing more. It's the real resources and their distribution that matter.
In real terms, inflation is just a growing shortage of some real resource relative to people's desire to acquire and use it. Government's use of resources in pursuit of its own projects can certainly cause such a shortage. So it's important that the resources government chooses to use in pursuit of it's own projects comes first from the pool of those that would otherwise not have been used, then from those who would otherwise use those resources in the least socially valuable ways.
When the real world is connected to our monetary system, this implies that spending is not only important, but largely disconnected from the decision to borrow or tax. All that matters is the spare capacity of the market into which the government spends. If there's enough spare capacity to meet everybody's needs and desires, there won't be any inflation. If there isn't, there will be.
Where will this inflation be? Well, obviously, in the market where the shortage of spare capacity exists, and in any markets downstream of that market in the production process. That is, unless the the government taxes its competitors in the markets where it intends to spend. This passes the inflation downstream as producers pass their costs to their consumers, where it can again be headed off by further taxation of the purchasers in those markets. But this further taxation has pernicious effects, as the government is not spending in those markets nor intending to spend in those markets, so as effective demand drops, so does production, resulting in further shortages and more unused capacity. This results in inflation and recession/depression.
There is one possibility that might save a government that decides it has to take resources that would otherwise have been used for some private purpose from the real inflation or shortages doing so would cause. This would be if the production that occurs in response to the government's activity is at least as great as the production that would have occurred were it not for the government's confiscation of resources. In this way, the increased difficulty of doing private business in the market where the government's buying up scarce resources is offset by the increased ease of doing business elsewhere. And the government's tax schemes to head off inflation in the markets in which it spends, which only serves to spread the inflation around, would actually work as the increased production works its way through the economy from the other direction.
And because our monetary system is designed the way it is, where unused productive capacity can only be brought online privately through borrowing or reducing net savings, the decision by the government to "print" money to spend in markets where there is spare productive capacity will never be inflationary, so long as private borrowers and savers don't decide to liquidate their savings or extend their borrowing to buy in that market in competition with their governments.
And this is where fiat money systems do become relevant. Remember that taxes began as the resources and people needed to do what the government needed done, which it confiscated. Then they became the resources the government confiscated to pay those first people for the resources and time the government needed. With a fiat monetary system, the government doesn't need to confiscate anything to pay people anymore, it can just print the money. But if it does so, it increases the amount of money in the economy relative to the amount of resources out there, which leads to either inflation or savings, and usually a bit of both. Excess savings can cause huge pricing fluctuations as that savings buys, and then sells in varying markets seeking the greatest return. So the government taxes back out the excess money to prevent inflation and excess savings, stabilizing prices.
So, finally, in a fiat system, this is why governments tax: to prevent inflation and excess savings. The amount the government needs to tax is equal to the amount the government spends less the value of the increased production that occurs as a result of the use the government makes with the resources it buys over the value of the production that would have otherwise occurred if the government didn't buy and use those resources. If the production that results from the government's purchase and use of resources is twice as great as the production that would have occurred otherwise, then the government doesn't need to tax anybody at all to prevent inflation or excess savings. If the government spends only in markets with plenty of spare capacity, it doesn't need to tax. If the resulting production is even greater than that, then the government has to do some more unfunded and less productive/more competitive spending to prevent deflation.
And keep in mind here that the alternative to taxation for funding is not simply borrowing from the private sector. The alternative is to simply print the money or borrow from itself. Borrowing from the private sector will only work so long as the accumulated debt is never intended to be paid off, i.e. so long as the old debt is continually rolled over into new debt, or the accumulated debt is eventually paid off in printed dollars, not taxed dollars. If you try to pay for the debt with taxes, you'll just end up with deflation. That's the reality that a fiat monetary system gives us, and if we try to ignore that reality, it will bite the whole economy in the butt.
So far, everything that's been said has been from a fairly hypothetical, though reality-based, perspective. I've said nothing about the specific situation the US economy finds itself in, nor about how to use this perspective to understand how we got where we are and how to get out of it. In truth, once you understand this perspective, using it to understand the real world is fairly simple. But that's a task for a different diary.