re: Biden's Campaign Strategy Revealed

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Why wouldn't higher taxes be an underlying inflationary pressure? I understand it doesn't quite fit the supply/demand curve but it does essentially artificially inflate prices.

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Higher corporate taxes usually result in higher prices, but inflationary pressure isn't "anything that causes prices to go up." It's two different problems - inflation AND "other shite that causes prices to go up." My point isn't to nitpick semantics; I'm suggesting that they've already got one problem on their hands (inflation) and they are potentially going to make it worse.**

Inflation is due to demand (demand pull = price inflation). Essentially more dollars available to chase goods, resulting in a supply/demand imbalance reflected in the price (higher). Cost-push inflation is caused by cost increases on the inputs/materials, but taxes don't really fall under that. Same effect, but different cause.

Higher taxes on corporations that are simply passed onto the consumer in the form of price increases is just that.

Two different mechanisms/causes. Either can happen without the other or they can happen at the same time, one on top of the other.

**Taxes are actually an inflationary check because they reduce the money supply, resulting in fewer dollars chasing goods (reduced demand). It's more easily seen at the consumer level (higher taxes leave YOU less to spend; less to spend results in spending less; results in less demand; assuming stable supply, stable prices), but it can have effects at the corporate level too.

None of it is a straightline cause-->effect though. Economics is more like a blob - constant interaction between forces. Very reactive. All you really do is stabilize it in a way that smoothes it out and keeps it somewhat steady. Push too hard on anyone thing and the swings get volatile.

Example: Raise taxes on corporations and they pass it on to consumers in the form of a price increase. Well shite, inflation has already caused prices to increase and consumers are at their limit, so demand falls, which pushes back on that price increase.

What these idiots in office will probably do is fuel BOTH sides. Raise corporate taxes and cause consumer prices to increase while ALSO pumping "free" money to consumers so they'll gladly absorb the price increase. The cycle ends at some point - the money spigot runs dry or we keep printing our way into oblivion and the wheels fall off.