Spencer Heath Archive

Item 867

Random taping by Spencer MacCallum from conversation with Heath on the road between Baltimore and New York.

December 1, 1955

Original is in item 860.

They talk about taxation not being inflationary. I have seen that stated even in the Wall Street Journal, and never could make any sense out of it. All taxation is inflationary, in my mind, in that it takes goods out of the market, and the taxed victim has to go to market with fewer dollars and meet government competition — his own dollars competing against him — buying goods at the same place he is buying them. The government grabs a man’s money, and when he goes to turn his money into goods, he only turns what is left of his money. He buys with that, and the government buys with the other part of his money that has been taken away from him. And so they bid against each other to get it. That makes the price higher. The government depletes the market, and so it makes a scarce market in which the tax-payer has to buy. That makes his dollars of less value, inflates the tax-payer’s dollar, the ones he is allowed to keep.