cross-posted from citizenshipsolutions blog
written by John Richardson
Introduction: Penalty as a part of American Culture
"U.S. tax, form and penalty club": Google "IRS penalty as part of American culture" and see a wide range of results https://t.co/eR0QTZ2sOH
— Citizenship Lawyer (@ExpatriationLaw) June 25, 2017
The above tweet links to a wide range of examples of America’s culture of penalty.
The purpose of this post is to explore how inflation results in the facilitation of enhanced penalty collection in America today.
What is inflation?
In its simplest terms:
“Inflation is defined as a sustained increase in the general
level of prices for goods and services in a county, and is measured as
an annual percentage change. Under conditions of inflation, the prices
of things rise over time. Put differently, as inflation rises, every
dollar you own buys a smaller percentage of a good or service. When
prices rise, and alternatively when the value of money falls you have
(Note his use of the words “goods and services“. Are
FBAR penalties and the S. 877A Exit Tax consumer goods or
Inflation can either be helpful or can be hurtful. Some benefit from
inflation and others are hurt by inflation. At a minimum, inflation will
always erode the value of cash.
Effect of inflation on owners/lenders of cash: When it
comes to cash inflation will hurt the owners/lenders of cash. This is
because inflation will erode the value of cash.
Effect of inflation on borrowers of cash: Inflation
will help he borrowers of cash. This is because inflation erodes the
value of the cash that must be repaid.