alt Hacker News> It is driven primarily by the monetary policy
Yeah, that's why I mentioned the fed.
> It would mean that countries with low taxes have very high inflation and this is not the case.
It's about the total balance of government spending and taxes. The point being made is that tax breaks have the same effect as government spending. Recall that I was replying to
> Tax breaks, i.e. my money not being in your pocket means that they are stolen?
The government writing someone a million dollar check and the government giving someone a million dollar tax break (assuming they pay at least a million in taxes), contribute to inflation by increasing the money supply by a million dollars than it would be otherwise. Yes, this federal reserve is by far a larger driver of inflation, but the government giving this tax break still degrades the value of your money, same as if they wrote a check.
Of course, it is easy to view a tax break as a non-action, but that's exactly why the government gives so many tax breaks. Once you're taxing everyone, you can hand out tax breaks that's the same as handing out money only you can pretend that it's doing nothing.
Think of it as 3 Scenarios:
1) The island government writes a check to everyone except you, increasing their wealth by 50%.
2) The island government taxes just you for 50% of your wealth.
3) The island government taxes everyone 75% of their wealth, grants everyone but you a total tax-break, and you 25 percentage point tax break.
Basically the same result, only in one they say "It was fair, and we handed out a few tax-breaks, what's wrong with letting people keep their money?"
1) wealth is not increased by tax break, only current income is increased
2) if government gives everyone tax break but not me, it means only that the government taxes only me
3) if everyone has 50% more money, there is very high probability that my business will go up A LOT
Seriously, dude, it’s not worthy anymore to try and explain to you very basic stuff. Inflation is not a balance between taxation and spending. All Middle Eastern countries are having huge spending and almost zero taxes. I asked you very simple question and you couldn’t answer.
What bothers me most is why people write about things they have no clue about and clearly haven’t even put a decent thought into it.
Basically what you believe in is that the thieves are controlling the inflation because they get some of the citizens wealth.