Bezos said such policies don’t have anything to do with inflation, but he was wrong.
As for the corporate rate, Summers explained, it’s generally assumed “that every dollar of stock market wealth generates between 3 and 5 cents of extra consumption.”
“Everyone would agree,” Summers said, “that progressive taxes reduce demand by something.”.
“If you thought that the capital gains rate was going to go up in 2022,” Summers told me, “you would sell in 2021.”
Now we’re left with the inflationary effect of an expected tax hike without the tax hike itself.
When you’re even moderately rich, it’s never really a bad time to repaper the living room or to vacation in Crete.
That means it’s never really a bad time to increase five percenters’ taxes and discourage such inflationary consumption at the margins. »