Technically, inflation is just another form of taxation.
Milton Friedman, an economist from the Chicago School of Monetarism, coined the phrase “inflation is taxation without legislation” to explain how inflation and rising prices can reduce the value of money and purchasing power, similar to higher taxes. Friedman believed that inflation could be managed by keeping the volume of moving liquidity in line with the amount of products in circulation. Inflation is when the price of goods and services increases across the economy, which can reduce the value of assets and a currency’s purchasing power. This can make taxpayers less well-off due to higher costs and “bracket creep”, while also increasing the government’s spending power. Some say that inflation is a “hidden tax” that can be especially harmful to people who have the least ability to pay. Inflation and money creation are closely linked, and the government can create money through taxing, borrowing, or printing it. Printing money to finance a deficit is sometimes called an “inflation tax”.