The public’s understanding of inflation, particularly regarding its cumulative effects over time, is limited. Modern tax systems, which are linked to nominal values in fiat currencies, interact with inflation in ways that often escape scrutiny.
Oliver R. Hoor from our Luxembourg member firm ATOZ Tax Advisors, has recently published an article In Tax Notes International, analysing the structural drivers of inflation, the methodological challenges of measuring it, and its long-term fiscal consequences. He also explores how inflation can quietly amplify tax burdens in fiat-based systems, effectively functioning as a fiscal instrument.
You can read the full article here.