Taxing the poor
If you put $1,000 in your piggy bank in 1960 and took it out to spend in 2000, you would discover that your money had, over time, lost 80 percent of its value.
Despite all the political rhetoric today about how taxes won’t be raised except on “the rich,” inflation transfers a percentage of everybody’s wealth to a government that expands the money supply. Moreover, inflation takes the same percentage from the poorest person in the country as it does from the richest.
That’s not all. Income taxes only transfer money from your current income to the government, but they do not touch whatever money you may have saved over the years. With inflation, the government takes the same cut out of both.
It is bad enough when the poorest have to turn over the same share of their assets to the government as the richest do, but it is grotesque when the government takes a bigger bite from the poorest.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Always spot on.
CycloneCDB on December 11, 2012 at 5:31 PM
It always bears repeating: Government has no money of its own. It can only get money through taxation or through inflation due to borrowing. There is no other option.
Actually, borrowing is worse because it degrades the currency through inflation AND has to be paid back with real money at some point…or the dollar collapses.
So that’s a grim future.
Meric1837 on December 11, 2012 at 5:39 PM
I don’t know why I even post this stuff anymore. You all know it if you’ve been reading HA for any amount of time.
Meric1837 on December 11, 2012 at 5:41 PM
Yes.
And Thomas Sowell has a genuine talent for stating complex economic issues in words that most people can understand.
UltimateBob on December 11, 2012 at 5:47 PM
Why the GOP doesn’t drum on this, I’ll never know. Without any legislation required, inflation robs us of both income and savings. The less you have, the harder it hits. Coupled with entitlements and skyrocketing energy costs, it’s a massive redistribution that favors government dependents, the Dems’ natural constituency.
Obama’s plan is to inflate his way out of debt, and redistribute wealth in the process.
petefrt on December 11, 2012 at 6:06 PM
Note exactly true for those who get free housing, free transportation, free electricity, free food, free phones all pegged to an inflation index. It actually works out pretty good for them, it’s the poor working stiff who’s getting screwed on both ends.
celt on December 11, 2012 at 6:10 PM
I think it was the great Homer Simpson who coined a word to describe these poor souls.
“Suckers”, I believe was the term.
connertown on December 11, 2012 at 6:32 PM
I’ve read several of Sowell’s books and have a couple more on the way. I just read his memoir, A Personal Odyssey, and I highly recommend it. It was fascinating reading.
backwoods conservative on December 11, 2012 at 7:14 PM