[Spartan79]

Statists love inflation, when it is combined with progressive taxation of income. As nominal incomes rise the government’s take, as a precedent of total income, steadily creeps up as more and more of the subjects move into higher tax brackets, even if their real incomes remain static or even decrease. This without the pols having to ever actually vote for an increase in tax rates, and by doing so incur the voters’ wrath.

On the flip side, deflation would produce the opposite result: as price and income levels fall, the government’s share of the pie declines, as the subjects slip into lower brackets.

So, yes, the government hates deflation and loves inflation.

This is also why statists would not prefer a consumption tax as opposed to a progressive income tax. Under a consumption tax the government’s share of total economic pie would not increase automatically; to increase the government’s take, pols would have to vote to increase the rate.

[arthurus]

A Constitutionally mandated 9 or 10 % flat tax would require many fewer agents and employees to implement. It would have to be a flat tax with no deductions, exemptions or other "adjustments" at all from the first dollar of income. The IRS would be reduced by at least 90%. A consumption tăx, unless also Constitutionally mandated and universal for a defined set of transactions at the ultimate end of the chain i.e. the ultimate consumer would become complicated and manipulated as bad as or worse than the present system. A rational replacement tax for the current income tax, whether flat tax or sales tax must be in a Constitutional amendment with no changes permitted and no complications opens it up to manipulation like Boortz's favorite Fair Tax with its "prebate." Anything that changes numbers based on numbers collected by some government or other agency must become soon corrupt.