We should raise the inflation target to 4% and hold it there for at least a decade.https://twitter.com/JHWeissmann/status/1263130422915014659 …
Isn't that basically a net 50%+ tax on all savings, investments, & pension assets over the next decade?
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No. Old loans drop in value but nominal interest rates rise on new loans so there's no loss. Stocks should keep pace because inflation also applies to revenue numbers. There is a second-order interaction of inflation with capital gains tax but it's small.
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It is a tax on mattress stuffers though!
End of conversation
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It's a tax on saving, but not on assets, which will inflate with inflation. (So long as there's demand for assets.)
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This is backwards actually. It's a tax on some existing assets but not on future saving.
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presumably that is part of the point.
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