The Great Tax Revolt of 2012 by Rich Karlgaard
The Bear on Nov 17 2008 at 9:16 am | Filed under: Economy, Taxes
Here is what will happen. Inflation is sure to reignite at some point. When? Well, that depends on when you think the economy gets back to 3% or better growth. It won’t happen tomorrow. The fourth quarter will be as ugly a quarter as we’ve seen since 1982, and I guarantee you that no one will be talking inflation for several months.
What of 2009 and 2010?
Sooner or later the economy will recover. When it does, figure inflation to kick in–the Federal Reserve has poured $1 trillion or so into the financial system just since September, according to Shilling. Also expect taxes to go up, just as President-Elect Obama has promised.
Inflation and progressive taxes are a toxic brew. We haven’t heard the phrase “bracket creep” since Ronald Reagan ran against Jimmy Carter in 1980. I predict the 1970s will play out again. Revolt against bracket creep will re-emerge as a top political issue soon after the economy recovers, the Fed’s easy money will spill out as high single-digit inflation and Obama will fulfill his election promise to hike taxes on the “rich.”
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