Mixed economy and money supply

In an earlier post, I wrote:

It seems that the role of the government in a mixed economy is both that of judge and party: the government judges the quality of competition by ensuring that no single agent can affect prices, but in order to promote public goods it must have the ability to itself affect the prices of public goods favourably. For this the government must have access to a substantial fraction of the available money, and the only way to obtain it is by taxation. Since the government regulates the market, it makes sense that economic activity is taxed (income tax, sales tax, etc). Poll taxes make less sense because they tax entities whether or not they take part in economic exchanges in the market.

Since then I have come across some interesting ideas on monetary reform along the following lines.

Currently, money is created by being lent at interest (both by the central bank lending to financial institutions and the latter lending to individuals or firms). Public spending can never be fully funded by taxes, and so the government must incur debt (by issuing bonds).

Alternatively, the government would create the money necessary to cover any budget shortfall, and then spend it (not lend it) into the economy. One of the problems with this approach to the money supply is that, according to conventional wisdom, increasing the amount of available money increases inflation.

But, apparently, modern macroeconomics is based on neutrality of money, namely, that the amount of money available and the interest rates have no impact on the economy! Then there should be no problem in eliminating taxation altogether and just printing all the money that the government needs to get things done.
What is going on?