The federal government prints money. They pay off the debt with it. Printing money inflates the money supply. The value of the dollar goes down, savings devaluate as do investments.
Doesnt this mean that Inflation is a TAX?
2007-02-13 02:39:14 · 5 answers · asked by kent j 3 in Business & Finance ➔ Taxes ➔ Other - Taxes
Interesting concept but, NO.
2007-02-13 04:19:31 · answer #1 · answered by Dizney 5 · 0⤊ 1⤋
Of course it is. Because the federal income tax is progressive, the Treasury takes in more as nominal incomes go up. This is especially insidious because of the Alternative Minimum Tax that Congress enacted. It's a neat trick. Government gets to raise taxes and then turn around and say to you "I didn't vote to raise taxes. In fact I voted to cut them". Right.
To the extent that inflation increases more than the market has anticipated, it is also a sort of tax on creditors that is paid to debtors.
2007-02-13 11:07:19 · answer #2 · answered by SDD 7 · 1⤊ 1⤋
No.
The government doesn't increase the money supply, as measured by the Fed's M1, M2 or M3 when it prints money.
You're making some basic assumptions that are flawed. Do a little research first.
Also, remember that tax brackets are indexed for inflation.
2007-02-13 10:44:58 · answer #3 · answered by Box815 3 · 3⤊ 2⤋
no. nice try at least thinking outside the box. it's inflation
2007-02-13 10:55:19 · answer #4 · answered by jim06744 5 · 1⤊ 1⤋
Deep thought.
2007-02-13 10:42:09 · answer #5 · answered by G's Random Thoughts 5 · 0⤊ 2⤋