The most effective system in history by far (and it's not even close) Is capitalism. One of the primary tenants of capitalism is that in order for it to work for every dollar paid a dollar of value must be created. That system can sustain a certain level of inefficiency and donation and charity but only a little before it begins to drag the entire system to a halt.

You've created some sort of weird closed loop where money is spent and then taxed again into infinity and that's just not a viable thing. There's nothing in that loop that creates the wealth in the first place. Well doesn't exist unless it is constantly created and not only would your system not be able to function for any length of time, it would basically guarantee that poorer people would never have a chance of getting ahead I would be stuck in a perpetual cycle dependent on the government and unable to move out of their class