> How exactly does this inhibit tax collection?

If you have something that lets you "transfer large sums of cash untraceably across the globe, with no way for the government to do anything about it," it's going to make it easier to hide income and assets. That inhibits tax collection. (Same way cash does.)

I bet if we took all the legal and illegal offshore shenanigans and the laws written by the wealthiest that create more loopholes, the amount of "inhibiting" of tax collection by cryptocurrency in comparison is a rounding error.

Crypto doesn't let you transfer cash. Someone has to sell you the crypto for cash, and someone has to buy the crypto for cash... at both ends, taxes and law enforcement can act.