Sowell highlights one way an overspending government taxes the poor

With all the political rhetoric about raising taxes on “the rich,” Thomas Sowell devotes his latest column to a time-tested method the government uses to raise taxes on the poor: inflation.

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. This can happen because the rich can more easily convert their assets from money into things like real estate, gold, or other assets whose value rises with inflation. But a welfare mother is unlikely to be able to buy real estate or gold. She can put a few dollars aside in a jar somewhere. But wherever she may hide it, inflation can steal value from it without having to lay a hand on it.

No wonder the Federal Reserve uses fancy words like “quantitative easing,” instead of saying in plain English that they are essentially just printing more money.

No comments yet. You should be kind and add one!

Our apologies, you must be registered and logged in to post a comment.