Journal of Economic Literature 1980
Inflation and Taxation: Reviewing the Macroeconomic Issues
Abstract
PHE PERSISTENT presence of inflationary problems in most industrialized countries has lead to a renewed interest in the relationships between inflation and the tax system.' There exists a vast literature on the microeconomic aspects of this problem and especially on various accounting procedures used to compensate for distorting inflationary effects. These aspects of inflacounting will not be dealt with in this paper, at least not directly.2 This paper will begin with a typology of the effects of inflation on the tax system; next it will concentrate on some macroeconomic aspects of the impact of inflation on the tax system on the one hand and the impact of the tax system on inflation on the other. On a more general level this problem leads to the question of how far inflation-intentionally or unintentionally-acts as a means of taxation, i.e., as an alternative way to transfer resources from the private to the public sector of an economy.
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