bracket creep

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Bracket creep

The gradual movement into higher tax brackets when incomes increase as a result of inflation.

Bracket Creep

A situation in which inflation pushes people into higher tax brackets, resulting in a higher tax liability, even though the purchasing power of their income has not increased. When inflation is high, the dollar amounts of people's incomes goes up, but because prices for products also go up this does not correlate to an increase in purchasing power. However, because tax brackets are listed by dollar amounts, it may mean that the government is entitled to a greater share of one's disposable income. To avoid bracket creep, a legislature may link a tax bracket to inflation or change tax brackets every few years.

bracket creep

The movement of a taxpayer into higher tax brackets as his or her taxable income increases over time. Bracket creep occurs because of the progressive nature of the federal income tax structure, that is, extra income is taxed at higher and higher rates. As a result of bracket creep, more and more individuals seek tax-advantaged investments. Bracket creep was reduced significantly by 1986 tax reform, which reduced the number of tax brackets. Several additional brackets were added in the early 1990s.
References in periodicals archive ?
After a certain period of time, shrinkage strain is observed in an unloaded concrete, while creep strain occurs in a concrete under a constant tensile load.
The results show that compared to a standard forming system, a sheet with the same basis weight produced with the Vortigen system has a higher number of fibers orientated along the CD direction resulting in both higher CD elastic stiffness and CD creep stiffness.
Even though this analysis includes only creep buckling at constant temperature levels, with slight modifications it is possible to expand it to non-constant temperature environment conditions e.
Sows were assigned randomly to 1 of 4 creep feeding groups, with parities of 1, 2 or 3+.
What they do is remove most of the creep from their strings, either one fiber at a time or as a group, by building them under extreme load, as much as several hundred pounds.
Creep tests were conducted at the intermediate temperature range from 673 to 873 K, corresponding to 0.
We considered our integrated AIS capability, developed using the RTT RDTE based on rapid requirements creep, to be an 80 percent solution for the fleet.
auction decreased from 2007, continued lock-up creep mitigates against
def,mean] values of PU versus PRF adhesives depends considerably on glue line thickness, which is best shown in Figure 11, where the relative creep ratios are given.
Effects of Electromigration on the Creep and Thermal Fatigue Behavior of Sn58Bi Solder Joints"
The culprit behind the whopping tax bill is bracket creep, the result of inflation which would hike wages but at the same time elevates them to higher tax brackets.