Stealth Tax and Inflation

 Inflation is a quiet tax we sometimes call the stealth tax. This tax is another example of taxation without representation since it is on the gross income we make. Inflation effects 100 percent of our earnings and 100 percent of the money we have already saved. When thinking about the future it is sometimes important to look at the past. The last 30, 35, 40 year averages have all been at 4.4 percent or higher and the highest period of 25 years was 5.9 percent.

Inflation sometimes helps us when we have a fixed payment like a mortgage or some other sort of fixed level payment. Those payments I make in the future will be with less expensive dollars so its like getting a discount, sorta!, maybe!, not!. You get what I mean. Remember the dollars are devalued by the Govt. when they print money, that's what inflation really is. Not the cost going up but the dollars have less value.

           

Average

Average

Annual Annual Annual Annual
Inflation Inflation Inflation Inflation
Year Rate Year Rate Period Rate Period Rate
1946 8.30% 1972 3.20% (5 years) (20 years)
1947 14.40% 1973 6.20% 1946-50 6.20% 1951-70 2.40%
1948 8.10% 1974 11.00% 1951-55 2.20% 1956-75 3.60%
1949 -1.20% 1975 9.10% 1956-60 2.00% 1961-80 5.30%
1950 1.30% 1976 5.80% 1961-65 1.20% 1966-85 6.40%
1951 7.90% 1977 6.50% 1966-70 4.30% 1971-90 6.30%
1952 1.90% 1978 7.50% 1971-75 6.80% 1976-95 5.40%
1953 0.80% 1979 11.30% 1976-80 8.90%
1954 0.70% 1980 13.50% 1981-85 5.50% (25 years)
1955 -0.40% 1981 10.30% 1986-90 4.00% 1951-75 3.30%
1956 1.50% 1982 6.20% 1991-95 3.10% 1956-80 4.60%
1957 3.30% 1983 3.20% 1961-85 5.40%
1958 2.80% 1984 4.30% (10 years) 1966-90 5.90%
1959 0.70% 1985 3.60% 1951-60 2.10% 1971-95 5.70%
1960 1.70% 1986 1.90% 1956-65 1.60%
1961 1.00% 1987 3.60% 1961-70 2.80% (30 years)
1962 1.00% 1988 4.10% 1966-75 5.50% 1951-80 4.20%
1963 1.30% 1989 4.80% 1971-80 7.90% 1956-85 4.80%
1964 1.30% 1990 5.40% 1976-85 7.20% 1961-90 5.10%
1965 1.60% 1991 4.20% 1981-90 4.70% 1966-95 5.40%
1966 2.90% 1992 3.00% 1986-95 3.50%
1967 3.10% 1993 3.00% (35 years)
1968 4.20% 1994 2.60% (15 years) 1951-85 4.40%
1969 5.50% 1995 2.80% 1951-65 1.80% 1956-90 4.70%
1970 5.70% 1996 3.00% 1956-70 2.50% 1961-95 4.80%
1971 4.40% 1997 2.30% 1961-75 4.10%
  1998 1.60% 1966-80 6.70% (40 years)
1999 2.20% 1971-85 7.10% 1946-85 4.60%
2000 1976-90 6.10% 1951-90 4.40%
2001 1981-95 4.20% 1956-95 4.50%

 

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