Free geld is a deflatory value, if you don't produce 1% of all value monthly there is less currency available, which means less currency has to cover same assets.
But each month you are being taxed, on your liquid assets.
Modern inflation punishes wage earners much more than capital earners, as the second category is closer to the money printing machine, and benefit better from it.
A deflationary policy would hit capitalists a lot more than wage earners, since it's basically a wealth tax.
I don't understand how deflationary policy is a wealth tax. The wealthy wouldn't lose anything, would they?
Inflation + capital gains tax is effectively a wealth tax, but deferred until the gains are realized. And it's possible to avoid realizing gains, e.g. by dying.
> I don't understand how deflationary policy is a wealth tax. The wealthy wouldn't lose anything, would they?
Wage earners would always receive "fresh" money, so their relative purchasing power grows compared to someone that just sits on their shrinking money. The money supply is a zero-sum pie. You actually can get richer if you're income stays the same but others have their net worth shrinking.
Free geld is a deflatory value, if you don't produce 1% of all value monthly there is less currency available, which means less currency has to cover same assets.
But each month you are being taxed, on your liquid assets.
Modern inflation punishes wage earners much more than capital earners, as the second category is closer to the money printing machine, and benefit better from it.
A deflationary policy would hit capitalists a lot more than wage earners, since it's basically a wealth tax.
I don't understand how deflationary policy is a wealth tax. The wealthy wouldn't lose anything, would they?
Inflation + capital gains tax is effectively a wealth tax, but deferred until the gains are realized. And it's possible to avoid realizing gains, e.g. by dying.
> I don't understand how deflationary policy is a wealth tax. The wealthy wouldn't lose anything, would they?
Wage earners would always receive "fresh" money, so their relative purchasing power grows compared to someone that just sits on their shrinking money. The money supply is a zero-sum pie. You actually can get richer if you're income stays the same but others have their net worth shrinking.
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