I agree with the sentiment that aggressive inflation shouldn't be used as the sole tool of moving money around. Decades of purposeful mismanagement of the economy to favour the few as got us into this position.
taxing the higher brackets like we used to would spread out the money throughout the economy and we could go back to sensible regulations that stamp down on the excesses of the stock market, so the money can get invested into more diversified spread of the economy that would help build out the middle class again.
inflation is already a tax, so higher inflation means rich people get taxed, while average consumers with no savings basically don t, the real problem here is where the inlfation is localized, being converged to consumers good rather than technology development.
Because of this, Joe that spent 10% of its salary on food now spends 15%, while Elon instead of spending 1$ on his egg spends 2$ which doesn t matter to him.
You can see the problem is that the inflation is caused by consumer goods being scarce rather than having inflation caused by economic pressure. Or even better the economic pressure pushes the industries to invest more using more water electricity and land that was used to make food, washing machines or just space to build houses which weighs even more on the average joe as economic pressures and products being scarce sum their weight.
Inflation is a devaluation of currency, not a tax; there is a major difference. The rich do not have their money sitting as cash, being devalued by inflation. Quite the opposite, they usually have it in assets, which appreciate alongside inflation, and benefit from governmental spending/money printing. This is historically the case. The gains to assets are generally higher than inflation, and are used as non-taxable loan collateral, not taxable income.
Normal people are hurt by inflation due to real increasing prices and stagnating income. Savings are devalued: Any cash on hand can now purchase less. If you have 0 savings, and income increases alongside inflation, the net outcome is neutral. This is almost never the case. The devaluation of current and future purchasing power is the point.
The inflation we've seen since 2019 is not tied to normal inflationary pressures nor scarcity. It's tied to profit seeking behavior, and maximizing profits per transaction. Sure, total inventory and manufacturing capacity can drive up prices, but so can collusion and price fixing behavior (chip industries come to mind).
That's a given that inflation to input costs impact sales price and margin. These are real costs.
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u/RPGxMadness 7h ago
I agree with the sentiment that aggressive inflation shouldn't be used as the sole tool of moving money around. Decades of purposeful mismanagement of the economy to favour the few as got us into this position.
taxing the higher brackets like we used to would spread out the money throughout the economy and we could go back to sensible regulations that stamp down on the excesses of the stock market, so the money can get invested into more diversified spread of the economy that would help build out the middle class again.