[ianferrel]

>Would anyone seriously argue that we should fight inflation by _raising taxes_?

My understanding is all generally accepted economic theories argue that raising taxes will fight inflation. So: yes. Basically everyone who understands macroeconomics argues that raising taxes will lower inflation.

It's not hard to see why, either: Inflation measures the costs of goods and services, but not of taxes. If you increase taxes, there is less money to buy other goods and services, and the price of them will go down.

[kelseyfrog]

In practice the reason taxes are not used to combat inflation is purely a political one - it's much more difficult to convince voters to raise taxes to combat inflation even if they are the one's complaining about it.

Take an extreme example - one could take a portion of their income convert it to bitcoin and then destroy the wallet's private key. If people did this en mass, it would be like burning money to reduce inflation. The only thing stopping people from doing this today is the social cooperation that it would take to accomplish it in spite of the game theoretic solution we find ourselves in today.

[olalonde]

> My understanding is all generally accepted economic theories argue that raising taxes will fight inflation.

I couldn't find a single source backing that assertion. And it doesn't make logical sense either... Tax dollars are pretty much guaranteed to be spent so the idea that "there is less money to buy other goods and services" is wrong. At least, with untaxed dollars, there is a chance that those dollars will be saved.

[ianferrel]

>Tax dollars are pretty much guaranteed to be spent so the idea that "there is less money to buy other goods and services" is wrong.

Government spending happens independent of tax receipts. If you raise taxes, people have less money to spend.

[ch4s3]

It would depend on the kind of tax. VAT and sales tax will. most directly counter inflation, and income taxes will have a sort of second order effect on aggregate demand. Other taxes may be farther removed from consumption.