Bracket Creep

What Does Bracket Creep Mean?
A situation where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power.

Investopedia explains Bracket Creep
This is a problem during periods of high inflation as income tax codes typically take a longer time to change.

Related Terms

Economic Recovery Tax Act Of 1981 - ERTA
Inflation
Purchasing Power
Purchasing Power Parity - PPP
More Related Terms

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