Inflation is a hidden tax on the poor from "summary" of Free to Choose by Milton Friedman
Inflation affects everyone in society, but its impact is particularly harsh on those with lower incomes. When prices rise across the board, it erodes the purchasing power of the money in people's pockets. The wealthy may be able to protect themselves by investing in assets that appreciate in value, but the poor have no such cushion. They are left to bear the full brunt of rising prices without any means to offset the loss. For the poor, every increase in the cost of living is keenly felt. It means having to stretch already meager resources even further to cover the same basic necessities. Inflation forces them to make difficult choices between essentials like food, shelter, and healthcare. As prices continue to climb, the poor find themselves slipping further behind, unable to keep pace with the ever-rising cost of living. Inflation is often described as a hidden tax because it has a similar effect on people's finances. Just as taxes take money out of people's pockets to fund government spending, inflation silently siphons off their purchasing power through rising prices. The difference is that while taxes are transparent and subject to public debate, inflation operates quietly in the background, steadily eroding the value of money without most people even realizing it. The insidious nature of inflation as a hidden tax is especially detrimental to the poor, who have little room to maneuver in their already tight budgets. Unlike the wealthy, who can afford to seek out investments that offer protection against inflation, the poor are left vulnerable to its effects. They are forced to bear the burden of rising prices without any means of mitigating the impact on their standard of living. Inflation as a hidden tax on the poor is a regressive mechanism that exacerbates income inequality in society. It widens the gap between the haves and the have-nots, pushing the most vulnerable members of society further into poverty. As prices continue to climb, the poor are left with fewer and fewer options for making ends meet, trapped in a cycle of increasing hardship. The true cost of inflation as a hidden tax on the poor goes beyond mere numbers on a balance sheet. It represents a fundamental injustice in society, where those who can least afford it are forced to bear the heaviest burden. As we strive for a more equitable and just society, we must recognize the impact of inflation on the poor and work towards solutions that address this pressing issue.
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