Cash Flow | Financial Awakenings

With all the talk about tax rates and the fiscal cliff, hardly anyone has mentioned what is probably the most effective and least understood tax in the federal arsenal: inflation.

Wait a minute. Isn’t it confusing to call inflation a tax?

It is. That confusion is exactly why inflation is the ultimate stealth tax.

One of the few deficit-reducing measures that has the support of both parties and President Obama is a change in the way the government measures inflation. Our lawmakers have agreed on another in a series of adjustments to the way they calculate the consumer price index CPI. The proposed changes will understate the future CPI even more than the current formula already does.

via Cash Flow | Financial Awakenings.

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