“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation” is a quotation that has been credited to Russian leader Vladimir Lenin (1870-1924), but there’s no evidence that he ever said it. British economist John Maynard Keynes (1883-1946) interviewed Lenin and wrote something somewhat similar in 1919:
 
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
 
“Its (government’s—ed.) fiscal policies grind him (citizen—ed.) between the millstones of excessive taxation and inflation” was cited in print in 1952. “Lenin said that the way to crush the bourgeoisie was to grind them between the millstones of taxation and inflation” was cited in print in 1966.
 
     
Wikiquote: Vladimir Lenin
Vladimir Ilyich Lenin (Russian: Владимир Ильич Ленин), born Vladimir Ilyich Ulyanov (Russian: Влади́мир Ильи́ч Ульянов) (22 April 1870 (10 April (O.S.)) – 21 January 1924) was a Russian revolutionary, the leader of the Bolshevik communist party, the first Premier of the Soviet Union and the main theorist of Leninism.
 
Misattributed
The way to crush the bourgeoisie is to grind them down between the millstones of taxation and inflation.
. John Maynard Keynes, paraphrase of Lenin Interview
   
Google Books
The Economic Consequences of the Peace, Volume 2
By John Maynard Keynes
London: Macmillan
1919
VI.13:
Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
(...)
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
 
28 March 1952, Waukesha (WI) Daily Freeman, “Taft in Antigo,” pg. 6, col. 2:
He (Republican Senator Robert Taft—ed.) has observed the federal government nibble away bit by bit the economic independence of the citizen and by its fiscal policies grind him between the millstones of excessive taxation and inflation.
 
27 June 1966, Richmond (VA) Times-Dispatch, “A Warning From Britain” by Anthony Lejeune, pg. 16, col. 7:
Lenin said that the way to crush the bourgeoisie was to grind them between the millstones of taxation and inflation.
 
Google News Archive
11 October 1974, The Age (Melbourne), “TV: Dry Eyes For The Petit Bourgeois Poverty Line” by John Pinkney, pg. 2, col. 2:
“THE most efficient way to destroy the middle classes,” wrote Marx, “is to grind them between the millstones of inflation and taxation.”
 
The Skeptical Libertarian Blog
Fake Quote Files: V.I. Lenin on Inflation and Taxation
by DANIEL BIER on 04.15.2013
(...)
For instance, this quote by V.I. Lenin is wildly popular and has been repeated countless times in blogs, newspaper articles, and books, going back to the pre-internet era.
 
“The way to crush the bourgeoisie is to grind them down between the millstones of taxation and inflation.”
— Vladimir Ilyich Lenin
 
(See? The longer dash makes it look much more credible.) This quote has a very long and fairly involved history, with ancestors as old as the 19th century. Thanks to the miracle of digital archives we can mark its entire evolution through transitional fossils, frozen in print:
 
1997: The first instance of this version in print (that I can find) is in a paper on (of all things) taxes in Bangladesh. It cites no source.
1988: A letter in The Bulletin (with Newsweek) had “middle class” instead of “bourgeoisie”: “Lenin stated that ‘the way to crush the middle-class is to grind them between the millstones of taxation and inflation‘, and that is exactly what is happening …”
1986: An issue of Books and Bookmen makes reference to a different variation of it: “Lenin threatened to grind the middle-classes between the upper mill-stone of taxation and the nether mill-stone of inflation; but Lloyd George did so as well.”
1984: A column in The Advocate attributed a version of it to Karl Marx: “One perhaps should remember that Carl [sic] Marx said ‘if you wish to destroy the middle class, then you grind it between the twin millstones of taxation and inflation.’”
1974: In what probably marks the earliest embryo of the quote’s attribution to Lenin, Ronald Reagan remarked in a speech near the end of his term as governor of California: “Make no mistake about it: inflation is a tax and not by accident. Lenin once said, ‘Through inflation government can quietly and unobservedly confiscate the prosperity of its citizens.’”
1961: Another probable ancestor of the quote comes from the November 1961 edition of The Freeman, which featured an essay by John Chamberlain containing this unattributed statement: “During the past generation the ‘middle condition of man’ has been ground between the upper and nether millstones of inflation and steeply rising progressive tax rates.”
1956: An article about middle incomes in the Economist may have been the original source for the symbolism later used by others: “These incomes are truly caught between the upper millstone of steeply progressive taxation and the nether millstone of inflation.”