Movement into a higher tax bracket as taxable income increases.
- To fix real bracket creep permanently, tax brackets should be adjusted for real income gains, or tax rates should be cut slightly each year.
- As the operation of bracket creep tends to slowly increase the ratio of tax revenue to GDP, this approach will allow for modest increases in the share of national income allocated to health, education and other services.
- One way to ease public discontent would be to lighten the burden and remove the continuous automatic theft of income that is known as bracket creep.
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