Their worth is not tied to the government's ability to levy taxes. The currency's advantage over others may be that the government only accepts that form of payment but that still doesn't give the currency value.

Look at any country with hyperinflation that still collected taxes and you'll see the true worth of the currency. The government's backing of a currency, even through taxes, does not inherently give it value as we've seen before.

Hyperinflation is a symptom of a collapse in output. Taxes bind the value of the currency to that output. If the output goes, also goes the value of the currency; we are in agreement.