Since taxes are on nominal gains, in case of 10% inflation, the owner of a stock or a real estate becomes liable for a 10% increase in the equity value even though the real gain is 0%.
Imagine the scenario with 1% monthly inflation (~13% annual inflation). If you spend 10,000$ on day 1 of your billing, the statement closes on day 30, and you pay back in full by day 60, the credit card company lost 2 months of value ~200$!
When inflation is less than 2% nobody cares about paying late. But when inflation is 10%, businesses want to delay payments to their suppliers. A 2-month delay leading to an extra 1-2% in revenues can increase the profitability of brick-and-mortar businesses by 10-20%! In reality, it just creates one more dimension of haggling between businesses and their suppliers. Such haggling is common in parts of the world with persistent inflation.
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