by Brian Balfour
Senior Vice President of Research, John Locke Foundation
The deadline for filing taxes was yesterday, but Americans continue to pay a steep tax every day – inflation.
The annualized inflation rate measured last month came in at 8.5%, the highest in 40 years. Just like the income tax reduces the amount of your paycheck, inflation reduces the purchasing power of your income, while diminishing the value of your savings.
The inflation tax hits low-income households the hardest, because most of their income is spent on necessities and they are least likely to see wage gains that keep up with the rising cost of living.
Indeed, basic necessities like gasoline, groceries, and living expenses – which consume the bulk of low-income household budgets – led the price spikes.
The Biden administration is laughably calling this the “Putin Price Hike,” but nobody outside of the focus group that approved this slogan is buying it. Prices had been rising across the board for several months prior to Russia’s invasion of Ukraine.
For their part, NC progressives are embarrassing themselves with their absurd excuse-making for the inflation, doing everything they can to deny the true cause of price inflation: the massive money printing fueling unprecedented spending in response to the covid lockdowns. Indeed, last year they claimed “Throwing money at the problem of poverty actually works.”
Yes, it works if your goal is to paper over the economic devastation of shutting down the economy in the short term, tomorrow’s consequences be damned. Well, tomorrow is here, and the inevitable rise in the cost of living is crushing the little guy, pain that progressives could not care less about.