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At the current rate of inflation (12%?) the government taxes you even if you don't have your money in the bank.

st3v3r 11y ago
That claim makes absolutely no sense. Taxes are revenue the government brings in. It can then use that money to do stuff. Inflation does not bring in revenue, and does not make it possible for the government to do stuff.
- anon4this1 11y ago
  you should look up "debt monetization" and investigate how it relates to quantitative easing and money printing. Cliff's notes is that quantitative easing is really money printing used to finance government spending, and is really just another form of taxation, although it goes through a slightly convoluted process to get there.
- cmsmith 11y ago
  Unless the inflation is caused by the government printing money. If 10 citizens each have $10, then there are $100 in the money supply. Now the government prints $10. If no actual value was created with that $10, then the value of the dollar has to drop. Now all the citizens have $9.1 (real value) and the government has $9.1 (real value). This is the same as a 10% tax on wealth.
  - thaumasiotes 11y ago
    From the given numbers, it sounds like a 9% tax.
- gozur88 11y ago
  Of course inflation brings in revenue. You get inflation when the government prints money (electronically, these days) to "do stuff". It's no different than a tax on any account you hold with that currency. And inflation allows the government to make money off of any asset you hold, too. Let's say you buy a brick of gold (or equities or real estate - doesn't matter) worth $100. In a non-inflationary environment, you sell you brick for $100 ten years later and... nothing. In an inflationary environment, you sell your brick ten years later for $1000. From the government's perspective $900 of that is profit for which you'll have to pay income taxes, even though the purchasing power of $1000 is the same as it was when you bought the gold. If your tax rate is 30% that's a $270 tax payment, and the government has managed, through inflation, to take 27% of the value of your gold brick. Inflation is a wealth tax. Always.

That claim makes absolutely no sense. Taxes are revenue the government brings in. It can then use that money to do stuff. Inflation does not bring in revenue, and does not make it possible for the government to do stuff.

anon4this1 11y ago
you should look up "debt monetization" and investigate how it relates to quantitative easing and money printing. Cliff's notes is that quantitative easing is really money printing used to finance government spending, and is really just another form of taxation, although it goes through a slightly convoluted process to get there.
cmsmith 11y ago
Unless the inflation is caused by the government printing money. If 10 citizens each have $10, then there are $100 in the money supply. Now the government prints $10. If no actual value was created with that $10, then the value of the dollar has to drop. Now all the citizens have $9.1 (real value) and the government has $9.1 (real value). This is the same as a 10% tax on wealth.
- thaumasiotes 11y ago
  From the given numbers, it sounds like a 9% tax.
gozur88 11y ago
Of course inflation brings in revenue. You get inflation when the government prints money (electronically, these days) to "do stuff". It's no different than a tax on any account you hold with that currency. And inflation allows the government to make money off of any asset you hold, too. Let's say you buy a brick of gold (or equities or real estate - doesn't matter) worth $100. In a non-inflationary environment, you sell you brick for $100 ten years later and... nothing. In an inflationary environment, you sell your brick ten years later for $1000. From the government's perspective $900 of that is profit for which you'll have to pay income taxes, even though the purchasing power of $1000 is the same as it was when you bought the gold. If your tax rate is 30% that's a $270 tax payment, and the government has managed, through inflation, to take 27% of the value of your gold brick. Inflation is a wealth tax. Always.