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The Hidden Tax (Vol. 5)

Updated: Feb 7, 2023

analyticsbox | Jun 23, 2021


Luxury Tax

Fair Taxes -

What does that mean and what exactly is a tax anyway?

We all want to think of ourselves as ‘fair’. So, consider this question posed by Thomas Sowell, an acclaimed, current day economist:


Since this is an era when many people are concerned about ‘fairness’ and ‘social justice’, what is your fair share of what someone else has worked for?”


The current administration has passed partisan legislation for $1.9 Trillion using ‘reconciliation’ to pass with only one-party support. There is another $4 Trillion proposed with some limited tax hikes on just those making over $400,000 and corporations. However, the tax hikes do not pay for the spending and the current budget that already shows major deficits as far as the eye can see. These plans will slow economic growth. So, let’s take a minute to analyze this.


Taxes take many forms, some obvious and some not so obvious. The bottom line is what can you purchase with the money you take home. Increasing or decreasing a tax rate on income has an immediate impact on what you take home and can buy. But, there is a hidden tax that is every bit as real and it definitely affects what you can buy. INFLATION! And this is magnified because most increases in corporate tax is passed on in the form of higher prices to consumers.


The extraordinary fiscal deficits we are running (and will continue to run indefinitely it seems), means the money supply is growing faster than the output of goods and services. This is the root cause of inflation, the unseen tax. This will do more harm to folks with lower income than increasing the tax will harm the ‘rich folks’. Don’t kid yourself, this is REAL!

The Bottom Line

We need to exercise fiscal discipline and bring the deficit down to zero over time. We need to start by stopping the indiscriminate, un-targeted payouts of money we don’t have and limit the growth of government. Over time, this will balance the budget and bring fiscal sanity back to America!

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