Anticipated inflation does not distort the tax system because taxes are typically based on real income, not nominal income.

Name: Anticipated inflation does not distort the tax system because taxes are typically based on real income, not nominal income.
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Quizplus · Accepted Answer

Taxes are typically based on nominal income, not real income, so anticipated inflation can distort the tax system by increasing tax liabilities without a corresponding increase in real income.

Anticipated Inflation Does Not Distort the Tax System Because Taxes