Do you think it also does not imply that you can freely exchange it such that you can pay debt settlements (i.e. tax) with it w/o incuring another taxable event?

Why do people say paying tax with it without paying tax on it. What about all the other things you would pay with it without paying tax on it. Legal tender has nothing to do with being taxed on it anyways. Foreign currencies are legal tender somewhere and you still pay tax on those. By the way, tax is theft.