Households hit hardest by inflation inequality, facing financial struggles and disparities.
Households in the United States experience different inflation rates, with poorer households facing higher price increases and losing more purchasing power. This inequality in inflation impacts federal income taxes, Social Security benefits, and Federal Funds Rates. The study used household data to create specific consumption baskets and found that around 1.77 million households may be paying too much in taxes, some could receive up to 9.70% more in Social Security benefits, and Federal Funds Rates could be 0.8 percentage points higher if a different inflation index was used.