the "inflation tax"

[Derek]

Anyone read much about this effect that fiat monetary systems supposedly have on the poor and middle class?  If it is really true, that the established powerful elite have a much easier time borrowing newly created money from central banks---then it is obvious that it is unfairly allocating wealth to those who are already wealthy, and thus some of the wealth should be redistributed somehow.  Just a thought I'd been having lately... anyone thought about this much? 

Now, under a gold standard I don't think this redistribution would be fair--since as society's ability to produce increases, everyone's savings appreciate. But the gold standard has other problems---let's save that for another topic...  does the "inflation tax" actually make redistribution of wealth more fair than totally free market capitalism?  I haven't seen anyone address this issue at all...except libertarians, but they say we need to go back to the gold standard and don't seem to answer this practical question about what to do under a fiat monetary system, which most of the nations in the world currently use.

[ahinton]

Anyone read much about this effect that fiat monetary systems supposedly have on the poor and middle class?  If it is really true, that the established powerful elite have a much easier time borrowing newly created money from central banks

Tell that to those who have become direct and indirent victims of sub-prime activities!

and ---then it is obvious that it is unfairly allocating wealth to those who are already wealthy,

Intentionally or otherwise, that's what most taxations systems are about in practice - and the more complex, intricate and draining the tax system is designed to be, the more the variously designed evasion and avoidance schemes ensure that the wealthy either do better than the less wealthy or simply leave and live under elsewhere other less stringent tax régimes. For example, the 186-day rule that applies in quite a few countries is all very well, but anyone wealthy enough to divide his/her time between more than two taxation régimes to the extent of spending less than that number of days in any one of them can often quite legitimately avoid paying any taxes at all.

Best,

Alistair