Inflation

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5% passbook account whether she pays 100% income tax on her interest income during a period of zero inflation or pays no income taxes during years of 5% inflation. Either way, she is ‘taxed' in a manner that leaves her no real income whatsoever. She would find outrageous a 120% income tax but doesn't seem to notice that 5% inflation is the economic equivalent.

- Warren Buffet