Inflation also triggers higher taxes, because you pay on nominal amounts not real amounts. So 2% inflation plus 2% real interest rate, you pay income tax on tot

Inflation also triggers higher taxes, because you pay on nominal amounts not real amounts. So 2% inflation plus 2% real interest rate, you pay income tax on total 4% rate, not 2%. Same with capital gains, you buy and hold something that keeps its real value, and you end up paying capital gains when you sell it, because inflation has pushed the price up.