Not everyone is aware that the banks increase the money supply

Banking is fraud because there is deception (deliberate or otherwise) which leads to economic, or material gain. People are not aware that the banks have the legal entitlement to increase the money supply, and it is to the advantage of the banks that it remains like that because (we can presume) people would not tolerate the arrangement, they would vote against it. There is no particular fraud at an individual, local level, the fraud happens Nationally, globally across the entire economy and political jurisdiction. It is a fraud because people would prefer Government to be without it, if possible, were they to know about it.

Banking is fraud not at an individual level but because people do not know that banks are able to increase the money supply. It is fraudulent (or deceitful) not to inform the public, given that they assume only the Government is able to increase the money supply. It is better to inform our customers and associates of the arrangement between us, if there is a possibility of misunderstanding. Some people might not realise that the banks increase the money supply.

There is nothing special about cash to make it valuable above bank credit

In a fiat economy the physical nature of the money is not the crucial feature, instead it is the contract or promise encapsulated in the unit of account. Cash is arbitrarily valuable, it can be used to cancel a tax liability if there is no disincentive against paying taxes, and no one goes to gaol then there would be no value in a fiat currency. If it becomes too difficult to collect taxes then the Government will lose power and the underground black economy will thrive.

Given that there is nothing inherent in cash which gives it value, only what it represents then we see that (it makes sense that) bank credit has the same value since it performs the same role, being able to extinguish a taxation debt. There is nothing special about cash to make it especially valuable as compared against bank credit.

Fractional reserve banking would not be possible without taxation because the money would be worthless

Bank credit is valuable only because of the deposit guarantee. The deposit guarantee makes it valuable because then if the Government is to refuse it in the payment of taxes, it will be being a hypocrite.

The deposit guarantee makes bank credit valuable because it makes it suitable for the payment of taxes, without the Government and taxation bank credit would be worth nothing, as with fiat cash. Bank credit is valuable only because of the Government and taxation, it is a suitable substitute for cash because of the guarantee. It is the combination of taxation and the deposit guarantee that makes bank credit worth more than nothing.

Printing credit is equally damaging in terms of prices as it is to print cash

Taxes aren't legitimate, but since we have taxes and a fiat currency it is not right (fair and equitable) that some organisations are allowed to increase the money supply, to the exclusion of others. Printing money by banks is not a violation of property rights because it is not aggressive but it is not fair, equitable that they have this exclusive (legal) privilege.

People are not (very) concerned about bank inflation unless they are printing bank notes in a fashion identical to a typical counterfeiter. They think banknotes (legal tender) are the only form of 'real' money.

There is no reason to care about the relative quantities of narrow money to broad, all that matters (and all that affects prices) is the sum of bank deposits plus the small sum of money (cash) outside the banking system. It is no worse, in economic terms, for a bank or institution to print cash than it is for them to issue credit, if they have a deposit guarantee; it is no less bad to print credit, printing credit is equally damaging.

If bank deposits are guaranteed then they will always be a suitable form of payment to settle tax debts

Banks do not collapse even though they have insufficient reserves for the reason that, because of deposit insurance, bank deposits are like cash and are suitable payment to the Government for taxes. Bank deposits become a form of money (recognised by the Government and suitable payment for taxes) because of the guarantee. Bank deposits are money because the Government declares them to be so.

If the value of bank deposits is guaranteed by the State then they will always be suitable for the payment of taxes.

If bank deposits are guaranteed then they will be suitable for the payment of taxes.

A fiduciary medium or commodity (in a fiat economy, where the fiat currency is prevalent and dominant) has value if it can settle tax debts. Bank credit is able to settle tax debts because it is guaranteed, the guarantee must, we can assume, mean that it will be suitable to settle tax debts. It would be a contradiction for the credit to be guaranteed by the State and to not be suitable in the payment of taxes. If bank credit is not acceptable to the State in the payment of taxes then we can say that it is not truly guaranteed, conversely if the guarantee is true then it must always be a suitable medium with which to settle tax debts.

A behaviour is not ethical if it is not being returned and reciprocated

Taxation is not ethical, it violates the ethic of reciprocity because no one wants to be taxed, by definition and we are not able to tax the Government. Ethical behaviours are ones that are reciprocated.

Credit is money if it is guaranteed by the Government

A banking licence turns credit into money. The Government can turn anything into money, as it can collect taxes which makes fiat currencies valuable. Banks can print money (valuable fiduciary media) because they have been permitted to do so by the Government. Credit becomes money if it is guaranteed by the Government.