If the government has some automatic way of making half the money in people's bank accounts disappear into thin air, then yes, prices can be redenominated. Except for all those long term debts and contracts with future prices agreed; it's not so simple to accept a 50% pay cut when your mortgage stays the same. And in practice, if the government does take half the value of the money in circulation out of people's accounts, most of it will be find its way directly or indirectly into other people's bank accounts, so prices won't go down anywhere near 50%

The major difference between taxing and renormalizing (or printing) money is stabilising the currency's value, but distributional effects are also important and mostly intended