With all the talk about tax rates and the fiscal cliff, hardly anyone has mentioned what is probably the most effective and least understood tax in the federal arsenal: inflation.
Wait a minute. Isn’t it confusing to call inflation a tax?
It is. That confusion is exactly why inflation is the ultimate stealth tax.
One of the few deficit-reducing measures that has the support of both parties and President Obama is a change in the way the government measures inflation. Our lawmakers have agreed on another in a series of adjustments to the way they calculate the consumer price index CPI. The proposed changes will understate the future CPI even more than the current formula already does.