Daniel Pilla writes against the Biden administration’s claim that corporate taxes would reduce inflation:
Flooding the market with more currency simply reduces the value of that currency as measured against the products and services for sale. As a result of the reduced value of the currency, merchants demand more for their goods and services. And the Fed’s monetary policy during the pandemic had the effect of flooding the market with more dollars in a shorter span of time than ever before in American history.
At the same time, the government strangled producers and service providers with its Covid shutdown orders. Tens of millions of people were paid to stay home. Some made more money sitting on the couch than they would have by going to work. That is the perfect formula for rising prices: flood the market with trillions of additional dollars while restricting production of most of the country’s economic output.
What about taxing corporations to reduce inflation? Taxing corporations in any amount cannot and will not have any bearing on inflation, because, as stated, monetary policy alone is responsible for inflation.
Read the whole thing here.