I believe this is an incomplete explanation. In order to survive the government has no use for pieces of paper, it needs to derive wealth and resources from the society  it controls. The government will always trade your taxes for goods and services at least as fast as you can pay them.
Denominating taxes in a specific monetary unit creates supply of that unit, usually oversupply (inflation), not demand. As any good with oversupply the value falls fast, so being acceptable for paying tax does not give value to fiat. If you have goods and services, say denominated in another, better, currency, you can always buy the tax currency on the cheap.

To actually give value to it's currency the government needs to refrain from spending it, it's not enough to require it for taxes.