Yes, inflation is a tax. Inflation facilitates "paper gains" in nominal asset values such as stocks or investment properties. As time goes on, the stocks that keep their valuation in line with inflation gain in "nominal price valuation," while at the same time they are not gaining in value at all in inflation-adjusted valuation. If and t…
Yes, inflation is a tax. Inflation facilitates "paper gains" in nominal asset values such as stocks or investment properties. As time goes on, the stocks that keep their valuation in line with inflation gain in "nominal price valuation," while at the same time they are not gaining in value at all in inflation-adjusted valuation. If and then the individual sells their stock, they face a huge "capital gains tax" based upon the difference between nominal sale price and nominal purchase price, even though there might have been little or no capital gain (or, at least, a much smaller capital gain) in terms of "inflation-adjusted" difference between sale and purchase prices.
Yes, inflation is a tax. Inflation facilitates "paper gains" in nominal asset values such as stocks or investment properties. As time goes on, the stocks that keep their valuation in line with inflation gain in "nominal price valuation," while at the same time they are not gaining in value at all in inflation-adjusted valuation. If and then the individual sells their stock, they face a huge "capital gains tax" based upon the difference between nominal sale price and nominal purchase price, even though there might have been little or no capital gain (or, at least, a much smaller capital gain) in terms of "inflation-adjusted" difference between sale and purchase prices.