Inflation Tax 101

Thanks for the warning, German central bank, one of the main culprits behind the problem you’re warning about.

Germans are suffering large cuts in real pay, Bundesbank report says – Workers in Germany are experiencing large cuts in their purchasing power as modest pay rises fail to keep up with record-high inflation, the country’s central bank said in a report on Monday.

It’s an age-old dirty trick. The EU, the central banks and the German government itself are pursuing policies that magically generate more tax revenue without openly raising taxes. If prices go up 10%, say, the tax receipts increase 10% too. Inflation also reduces government debt (if they borrowed 1000 but only have to pay back 900 in real terms). But thanks for the warning. That’s very considerate of you.

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