3 ms·

Sounds inflationary!

• pfannkuchen 11mo ago
  Well if the prices rise due to tariffs, and then more money is released via income tax reductions, the two effects may offset each other from the perspective of the consumer. Prices would rise, but the money available to the consumer would also increase. So I think it wouldn’t be the kind of inflation we usually see where prices rises but earnings don’t keep up. Wealthy people don’t pay much income tax anyway, so the effect on asset prices would not be huge probably. The middle class would have more money to spend on housing, which would increase housing prices if middle class spending was dominating housing prices, but with investor housing purchases being such a large component of house purchasing buyer pool it may mostly just shift who is buying houses over to the middle class a bit (due to available money increase going disproportionately to middle class people who actually have their spending power substantially eroded by income tax). Note that when I say wealthy people I mean independently wealthy, not high W2 earners, they aren’t wealthy IMO if their W2 job still generates most of their buying power.