Inflation Is Tax
Inflation is the most expensive tax we pay
In Turkey, groceries are almost twice as expensive as they were a year ago.
The weakness of the Turkish lira makes many products more expensive due to the exchange rate. However, the Turkish central bank shows no signs of tightening monetary policy.
Milton Friedman once said that “inflation is taxation without legislation.”
He is right. And the biggest problem is that inflation directly hits the lower classes of society. People who should be taxed the least.
Everyone who lives exclusively from wages, without other sources of income or investments, suffers year after year from the effects of inflation.
Hardly any public or private employer offers an annual readjustment that even matches inflation. This means that the purchasing power of these people decreases year by year.
High inflation in Turkey is driven by several factors. The weak national currency, the lira, has been driving up prices for a long time as it makes goods imported into Turkey more expensive.
On top of this, there are ongoing problems in international supply chains, which make preliminary products more expensive.
The other important thing is that energy and raw material prices are rising, mainly because of Russia’s war against Ukraine.
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