Скачать или смотреть Can Inflation Increase Government Income

During periods of high inflation, the U.S. government often collects more money without passing a single new tax law. This happens because many taxes are tied to dollar values rather than real purchasing power. As wages rise to keep up with inflation, people move into higher tax brackets even though they are not actually richer. This phenomenon is called “bracket creep.” At the same time, sales taxes increase because higher prices mean higher tax amounts on the same goods. Even capital gains taxes rise as asset prices inflate, despite no real gain in value. In the early 1980s and again after 2021, inflation quietly boosted federal revenue while households felt poorer. This creates a strange contradiction where governments appear financially stronger during economic pain. Inflation, meant to erode value, temporarily becomes an unplanned income source for the state.

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