bracket creep

English

Noun

bracket creep (uncountable)

1. (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).
   • 1985, C. Eugene Steuerle, Taxes, Loans, and Inflation: How the Nation's Wealth Becomes Misallocated‎^[1], page 34:

     The corporate tax is essentially a flat-rate tax; thus there is no bracket creep.

   • 1990, John B. Shoven, Joel Waldfogel, Debt, Taxes, and Corporate Restructuring, page 27:

     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.

   • 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.

Usage notes

Since only rises that adjust for inflation are considered, not those from increased skills or changed job description, this means that a worker doing the same work for the same notional purchasing power is taxed at a higher rate.

Translations

increased taxation caused by inflation

• Chinese:

  Mandarin: 支架蠕變／支架蠕变 (zhījià rúbiàn), 稅級爬升／税级爬升 (shuìjí páshēng)

• Finnish: verotuksen kiristyminen inflaation myötä
• German: kalte Progression f

See also

• fiscal drag