The Return of the Inflation Tax
 

Interesting OPINION piece
Certainly a partisan piece, but it does raise some interesting points


Link

All part of the big wealth redistribution plan.

Interesting? Perhaps to some. A partisan opinion with an agenda? Absolutely.

There is nothing unusual about NOT indexing revenue sources like this.

The surtax is on income over $500K (single) and $1 million (couple) -- personally, I would like to see it lower.

And the employer tax is on companies with payrolls over $750K -- which excludes many of the smallest businesses....and if any of those companies offer insurance through the Insurance Exchange, the companies would get a tax credit.

The notion of it being an "inflation" tax is fuzzy math at its best.

If the points are true.

Start with a highly questionable assumption of an annual inflation rate of 4% each year over the next ten years as noted in the opinion piece.

Quote:

Assuming a 4% annual inflation rate over the next decade.....

Then add the fact that the annual inflation rate has been at 4% (or above) only 3-4 times over the last 25 years.

The result is fuzzy math and an intellectually dishonest conclusion.

More Democratic BS talking points. People do not buy this pile of bull shit.

Here we go again! You must be on auto-pilot.

Economic facts and statistics (Not just Democratic, but Republican as well if you look at the last 25+ years) are BS and a WSJ column based on BS is factual.

The annual inflation rate to-date for 2009 and the relatively comparable CPI are both hovering around 0% for the year.

And NEVER in our lifetime (or as long as economic stats have been recorded) have we had 10 consecutive years of a 4% annual inflation rate.

But its NOT BS for the WSJ columnist to make that assumption.

I honestly dont know if its ignorance on your part, a deep seeded and emotional hatred for anything Democratic (as expressed in Nazi comparisons), or just an inane attempt at being provocative and/or promoting fear-mongering....or perhaps a combination of all of the above.

But you're always good for a laugh.

:biglaugha

Inflation tax is real and measurable. Do your own research people.

The same bullshit assumption in your article:

Quote:

Assuming a 4% annual inflation rate over the next decade,

There has NEVER been 10 straight years of a 4% annual inflation rate. No where close.

Quote:

As for the business payroll penalty, it is imposed on a sliding scale beginning at a 2% rate for firms with payrolls of $500,000 and rising to 8% on firms with payrolls above $750,000.

Nearly 90% of businesses in the country will not be subject to the "penalty" and the smallest businesses are exempt...the others will not be penalized, but in fact, will get tax credits, if they provide (and share the cost with employees) of basic coverage.

I guess you think if you repeat it, it makes it more credible.

You have provided no evidence that the numbers do not add up or that the facts are false about Inflation Tax. You don't have the credibility to say it is false. I agree that inflation has not been 4% for 10 straight years. The tax still exists.

Over 99% of taxpayers will not face the surcharge on income....it would initially only impact the top 1/2 of one percent of taxpayers....those making over $500K.

In ten years, based on assuming more reasonable inflation rates, it may hit a very small percentage of additional taxpayers...perhaps another 1/2 percent to maybe as high as an additional two percent of all taxpayers....with at least 98% of taxpayers remaining unaffected.

Does it bother me that in 10 years, the top 2% of taxpayers (those now making approx. $300K, but who would see their income rise in 10 years), rather than just the top 1/2 of one percent (those now making over $500K), may face a small surcharge on their income?

Not in the least. I would charge those fat cats now if I had my way.

Systems that allow for bracket creep are common around the world. Treasurers love it because of the steady growth in tax revenue, other pollies love it because they can give occasional "tax breaks" by resetting the brackets a bit.
I am in favour of progressive tax rates.

I did want to respond to this from Redux:

That may be right, but you've also never seen a US government debt in the 10+ trillion dollar range either. That will almost certainly cause inflation. Averaging 4% for the next decade is not an unreasonable assumption. Why do you think the price of gold is at an all time high?

I agree that a $10+ trillion debt and potentially doubling the debt over the next 10 years (IMO, unlikely), as we did over the last eights years, is unsustainable in the longer term. At the same time, during the last 10 years, the price of gold has more than tripled (quadrupled?), with no inflationary impact.

But its not potentially inflationary unless the dollar is devalued much more significantly that it has been in the last few years. Could that happen? Sure, if the Fed floods the economy with "cheap" dollars. But, that is not likely.

A high rate of inflation occurs most often during a vibrant economy, at full production and with low unemployment, when demand outstrips supply. When the economy is strong, companies pay higher wages, which enables employees to spend more, which causes other companies to raise prices, etc....and you have a wage/price inflationary spiral. I know that is a little simplistic, but we are nowhere near that scenario.

While most economic measures would suggest that we are out of the recession of the last two years, the economy is hardly at full production or full employment. Wages arent rising, prices arent rising and there is no such spiral on the horizon.

Or, inflation could rise at a significantly higher rate if we were hit with a sudden, unpredictable and long-term scenario like a major oil embargo, similar to that which was primarily responsible for the inflation of the mid 70s....but I dont think it is reasonable to assume that will happen.

Studies by the Fed and others would suggest that the inflation rate will remain low (well below 4% - it is now still hovering at around 0%), at least over the next 2-5 years while the economy continues to recover and grow at modest (3-5%) GDP annual percentage increases....beyond that, it is more guesswork, but 10 years of 4% annual inflationary increases? IMO, it is disingenuous and dishonest to use that scenario to make a case against so-called inflation taxes.

I havent seen any credible study that would suggest such a scenario, but if you know of any such studies, I'll give it a look.

That is exactly why you represent wealth redistribution programs.

A small theft is theft nonetheless, Redux, however disguised in righteous-sounding language. Now I begin to see the core of your mentality -- that is, the thing that keeps you a Democrat when men of sense (for instance, registered independent voters) are abandoning the Donkey Party right, left, center, top, and bottom. You're fighting a class-war. This is the hobgoblin of the small and resentful mind.

So of course, I do not do what you do; I make a point of not going around fighting a class-war. It's unworthy of me, and should be unworthy of you as well -- but for some damnfool reason I can't plumb, you don't really want me to regard you as intelligent. Thing is, I'd really rather I could think of you as a smart, with-it kind of guy. Not, IOW, as a moderately dilute socialist.