bracket creep
noun1
Economics, Government, Sciences, Taxation The move towards increased taxation when an inflation adjustment to a wage or salary pushes a taxpayer into a higher tax bracket (or, in a progressive taxation regime, further into a bracket).
- The corporate tax is essentially a flat-rate tax; thus there is no bracket creep.1985, C. Eugene Steuerle, Taxes, Loans, and Inflation: How the Nation's Wealth Becomes Misallocated, page 34:
- Bracket creep, however, was occurring only among individuals, not corporations. All other things being equal, this bracket creep increased the extent to which borrowing would be undertaken by individuals, not corporations.1990, John B. Shoven, Joel Waldfogel, Debt, Taxes, and Corporate Restructuring, page 27:
1 more example
- 2001, Frederick C. v N. Fourie, How to Think and Reason in Macroeconomics, 2nd edition, page 290, Bracket creep can be avoided by regularly adjusting tax brackets for inflation, so that the tax brackets remain unchanged in real terms.
- Related terms
- fiscal drag