Inflation can be considered a tax in at least two different ways.

I’ll use extreme examples to make the position clear. The hypothetical country is Ceteris Parabis - a small tropical island nation.

The money supply in Ceteris Parabis stands at 1 Billion CP Dollars.

The value of economic goods etc. (i.e. the underlying wealth supporting the CP Dollar currency) is also 1 billion coconuts.

You are a resident and citizen of the CP country and economy. You are a diligently honest hardworking citizen of CP. You always pay your bills and debts on time. You declare all your income and pay your taxes on time. You have worked hard and saved, and have 10,000 CP dollars in the bank. Which at April 2018 would enable you to buy 10,000 coconuts.

Your neighbour Joe thinks you are a mug, a sap, and very naive. Joe’s activities are somewhat nefarious. He brews and distils Coconut Hooch, but doesn’t declare these activities to the tax commissar of CP. He never pays a bill on times and runs up gambling debts of 10,000 CP Dollars.

The CP government / central bank decides to print more CP dollars and double the money supply. This enables them to sneakily balance the budget. By the end of of 2018 they have doubled the money supply to 2 billion CP dollars. The supply of coconuts remains at 1 billion coconuts.

You still have 10,000 CP dollars in you bank account, but you can now only buy 5,000 coconuts.

Effectively the government has just taxed you 50% of your savings and transferred that wealth across to the government.

To add insult to injury, the bank paid you 10% interest on your savings - giving you a paltry 1,000 CP dollars interest income. The CP government taxed you at 50% on your income. So you paid 500 CP dollars in tax to the government.

You now have just 10,500 CP dollars in your bank account which means you can buy 5,250 coconuts as at January 2019.

Not withstanding that you are now 4,750 coconuts worse off at jan 2019 than you were in April 2018, the government has seen fit to tax you on your increase in wealth by way of interest.

You have been royally screwed by inflation, used as a tax.

In real life sneaky and immoral governments (which is most of them) only let inflation run at modest rates and so the evidence that they are effectively taxing and double taxing their citizens is less obvious.

But inflation hits the savers and benefits those in debt. Those in debt only have to pay back the value of the debt in Ceteris Parabis Dollars. Since Joe owed 10,000 CP dollars he can now pay that back with 5,000 coconuts, where a year ago it would have required him to pay back 10,000 coconuts to pay off the debt. Savers lose and debtors win with inflation.Joe is laughing his head off and thinks you’re a mug. Unfortunately, with a government like CP has, Joe’s right.

So - if the Government has a large government debt, inflation helps the government even more. People who were foolish enough to lend money to the government, such as anyone who bought government bonds, lose money. So governments in debt have yet another reason to allow inflation to run.

Of course, governments where the Central Bank is owed money are foolish to allow inflation to rise. It actually works against the government in that situation. So the consolidation of debt with the central banks that occurred following the Global Financial Crisis of 2008 has created an interesting situation for governments who then allow their debt levels to keep rising, creating inflation.