If we are talking about say a house, i think the poorer person who rents (and has rent increase with inflation) would be much more negatively affected over time, notwithstanding the extra capital gains tax the person who owns the house would have to pay upon sale.
I agree that it would increase inequality not decrease it like people would assume a wealth tax (inflation + capital gains tax) would do. The problem I see with the government having their revenue tied to wealth tax becomes incentivized to do things that will make the wealthy wealthier, like maintain a higher rate of inflation.
However, fixed inflation targets (with central bank using interest rates to control) are generally not that beneficial for that purpose, as the inflation is known ahead of time and would be priced in.
Inflating away your debt only works if you can increase the inflation to be more than what the person you borrowed from thought it would be.
