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Topic: Bracket creep

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	Fiscal drag - Wikipedia, the free encyclopedia
		Bracket creep describes the process by which inflation pushes wages and salaries into higher tax brackets.
		Indexing tax brackets however does not result in CPI adjusted salaries being fully compensated for inflation as CPI adjustments are generally not distinguished from other income and so are taxed at the highest marginal tax rate.
		Many voters do not perceive the effects of fiscal drag, and so the government may prefer to adjust tax brackets manually once every few years - in effect restoring the real tax rates to their pre-inflation levels, but in a way that makes the government seem like they are giving the taxpayer an additional benefit.
	en.wikipedia.org /wiki/Fiscal_drag (433 words)

	Let's Talk Taxes - Bracket Creep: Fifth Column Taxation
		The bracket creep tax raid is the difference between the income taxes you pay now and the taxes you would have paid if tax brackets and the basic personal exemption (BPE) were indexed to inflation.
		This phenomenon, known as bracket creep, amounts to taxation without representation, given that the transition to partial indexation was not put before parliament.
		Bracket creep is the fastest growing tax in the land and it outstrips federal and provincial tax cuts combined.
	www.taxpayer.com /main/news.php?news_id=864 (846 words)

	bracket - Search Results - MSN Encarta
		asterisk, backslash, bracket, colon, comma, dash, exclamation mark, full stop, hyphen, inverted comma, parenthesis, period, point, question mark,...
		Bracket Fungi, also shelf fungi, any of about 1000 species of generally tough or woody fungi named for the bracketlike or shelflike shape of their...
		Increases in income due to inflation can push people into higher tax brackets, a phenomenon known as bracket creep.
	ca.encarta.msn.com /bracket.html (169 words)

	CFIB - tax creep
		Taxpayers in the middle bracket range will pay an average of $913 in extra-tax for the 1997 fiscal year and they are going to pay an extra $1313 tax in five years if the problem is not resolved.
		A full-indexation of the income-tax brackets in 1988 would have raised the limit on the lowest federal income-tax bracket from $29,590 to $35,375 and the second one from $59,180 to $70,751 in 1996.
		Tax bracket creep is one example of the federal government's clear choice of maintaining taxes of all kinds at an excessively high level.
	www.cfib.ca /research/reports/creep.asp (877 words)

	Tax Indexing: At Last a Break for the Little Guy
		Bracket creep in effect was to be buried No longer will taxpayers be pushed into higher tax brackets Now, some in Congress are having second thoughts and want to repeal the measure, be fore it even begins.
		They want to perpetuate bracket creep and, with it, their power to tax by the backdoor and enable the government to profit from inflation-causing programs.
		Bracket creep is a hidden tax, requiring no action by Congress.
	www.heritage.org /Research/Taxes/bg255.cfm?renderforprint=1 (1591 words)

	Income Tax - MSN Encarta
		However, unless special actions are taken, under the existing progressive bracket rate schedule, the proportion of your income taken by taxes would increase.
		In other words, the law could allow taxpayers to adjust, on their tax forms, the purchase price of assets according to the amount of inflation that occurs between the time of purchase and the time of sale.
		Then their joint income (combined income) may put them in a higher tax bracket than either was in when single.
	encarta.msn.com /encyclopedia_761564561_5/Income_Tax.html (1636 words)

	In taxing times, some things you need to know about bracket creep - theage.com.au
		The common definition of bracket creep - the effect of inflation pushing you into a higher tax bracket - is too sloppy.
		The second thing about bracket creep is that the only policy that would stop us being hit by it is annual indexation of the income-tax scale.
		So if you are measuring the extent of bracket creep, or if you are indexing the tax scale, you do it by reference to the CPI increase, not the increase in, say, average weekly earnings.
	www.theage.com.au /articles/2003/06/13/1055220770710.html (944 words)

	Let's Talk Taxes - Bracket Creep by the Numbers: A Legacy of Taxpayer Abuse
		Bracket creep refers to the effect (since 1986) where income tax brackets are only partially indexed to inflation.
		This is the amount of taxes that Ottawa now collects due to the 14-year effects of bracket creep.
		This is the amount that nine provinces (excluding Quebec) collected in extra taxes due to the cumulative effects of bracket creep in 1999.
	taxpayer.com /main/news.php?news_id=269 (638 words)

	Income Tax Bracket Creep 2006/2007
		Above $65,358 the income creeps into the $75,001 to $150,000 bracket in the 5th year.
		The forecast movement of the bracket points $75,000 and $150,000 in 2007/08 is not taken into account in the figures below.
		To illustrate the effect of bracket creep, look at the calculations for a first year taxable income of $68,000.
	www.users.bigpond.com /mcewing/BktCreep.htm (762 words)

	Australian Labor Party: It's official: Howard government abolishes bracket creep!
		But the bad news is that the government has really just chosen to define bracket creep away.
		But bracket creep can occur when a taxpayer's income does not enter a higher tax bracket.
		The government pretends this is not bracket creep.
	www.alp.org.au /media/0106/mscomprevsb160.php (340 words)

	NCPA Tax Policy - Bracket Creep Outpaces Workers' Income (Site not responding. Last check: 2007-11-01)
		Hundreds of thousands of others have been pushed from the 28 percent bracket to the 31 percent and 36 percent brackets.
		Some analysts are urging Congress to attack bracket creep by raising the income ceiling for the 15 percent bracket so that it applies to most middle-income families.
		Under current rules, under which brackets are only adjusted for inflation, the brackets would only rise 3 percent.
	www.ncpa.org /pi/taxes/may98d.html (284 words)

	John Quiggin » Blog Archive » Bracket creep (Site not responding. Last check: 2007-11-01)
		If you take the common definition of bracket creep ‘inflation pushing people into higher tax brackets’ and assume inflation is running at about 2 per cent per year, that would mean the cuts gave back four years worth of bracket creep.
		Given bracket creep, and the fact that the GST package was revenue negative, I wonder how they would compare.
		Bracket creep has been a hobbyhorse of us ‘lower tax’ types for as long as I can remember.
	johnquiggin.com /index.php/archives/2003/05/14/bracket-creep (798 words)

	Bracket creep
		JOHN HIGHFIELD: Let's come back to Australia now and bracket creep, that nasty fiscal affliction where even modest wage earners are pushed into a higher tax bracket because of inflation is again under real scrutiny as the election-promises band wagon rolls into a higher gear today.
		The problem with having a bracket creep reduction is that it's, you know, it's just a way that politicians can basically make heroes of themselves by giving back what they've been pinching for, you know, many, many years.
		Despite bracket creep, the budget slumped to a $1.3 billion deficit last year for the first time since 1996-97, despite a guarantee by the Treasurer, Peter Costello, that it would remain in surplus.
	members.iimetro.com.au /~hubbca/bracket_creep.htm (1645 words)

	Canadian Tax Foundation
		Partial indexation, in place since 1988, adjusts personal amounts and tax brackets for the next calendar year by the inflation rate, less 3 percentage points, for the 12 months ending September 30 of the year before.
		Because the annual inflation rate was less than 3 points in each of the last seven years, no indexing adjustments were made for 1993 through 1999, and individuals will pay an additional hidden tax as their cost of living increases.
		But as table 1 illustrates, the $675 increase in personal amounts does not eliminate the full effect of bracket creep since 1988, nor is it indexed for future inflation.
	www.ctf.ca /articles/News.asp?article_ID=656 (304 words)

	Tax cuts wiped out \| NEWS.com.au Business (Site not responding. Last check: 2007-11-01)
		But figures commissioned by the Opposition show the average worker has been given only a one-year reprieve from bracket creep - whereby workers' tax bills rise as their wages increase at the rate of inflation.
		Bracket creep will gobble up any gains you've got.
		Australian Chamber of Commerce and Industry chief executive Peter Hendy said last week the Government should have done more to abolish bracket creep by moving tax thresholds in line with the rate of inflation.
	www.news.com.au /business/story/0,,19138317-462,00.html (482 words)

	Reports of bracket creep are greatly exaggerated - theage.com.au
		Richardson estimates that bracket creep - the impact of inflation pushing more of your income into higher tax brackets - now costs taxpayers about $1.1 billion a year.
		In the three years since 2000, he estimates bracket creep has cost taxpayers about $3.3 billion: $7 a week for the average taxpayer.
		The conclusion is inescapable: the main reason that tax cuts to return bracket creep are small is that bracket creep itself is small.
	www.theage.com.au /articles/2003/05/14/1052885291911.html (450 words)

	Rule 73 (Site not responding. Last check: 2007-11-01)
		These increases in income led to a phenomenon called "bracket creep," where making more money (in some cases only a few hundred dollars) pushed you into a higher tax bracket.
		As a result of bracket creep, people discovered that a $5,000 pay raise could cost them $3,000 in additional taxes.
		With only six brackets for all taxpayers, it is highly unlikely that you will move from one bracket to another, even when you retire.
	www.ricedelman.com /planning/taxes/rule73.asp (600 words)

	Canadian Tax Foundation
		Federal tax brackets and amounts to calculate personal tax credits have not been inflation-adjusted since 1992 because the intervening inflation rate did not exceed 3 percentage points.
		The lack of full indexing since then has caused about $12,700 of income to creep from the middle to the highest bracket, and higher income earners pay a higher rate of tax on that amount.
		As a result, for someone with taxable income between $35,941 and $59,180, bracket creep costs $1,210 in 1997; with taxable income over $71,883, $1,782.
	www.ctf.ca /articles/News.asp?article_ID=287 (175 words)

	Matthew Yglesias: Must We Fix The AMT?
		The joys of bracket creep served the cause of progressive government very well for a long time and the AMT seems like a good opportunity to bring it back.
		A point on bracket creep: It is regressive, because if allowed to continue, soon the middle and the working class will be in the top tax brackets, and pay the same rate as the wealthy.
		Alex R: A point on bracket creep: It is regressive, because if allowed to continue, soon the middle and the working class will be in the top tax brackets, and pay the same rate as the wealthy.
	yglesias.typepad.com /matthew/2005/02/must_we_fix_the.html#c3862574 (2804 words)

	AxisofLogic/ U.S. Military
		Bracket creep is a way for the government to raise taxes without seeming to be raising taxes.
		The term "draft creep" might also be used to describe the way a full draft is "creeping" up on us.
		To some it may seem ironic that by writing this, I, an advocate of nonviolence, am defending the freedom of soldiers, soldiers who have had their freedom taken from them under the threat of imprisonment by the government they intended to serve.
	www.axisoflogic.com /cgi-bin/exec/view.pl?archive=41&num=4542 (1690 words)

	HobbsOnline (Site not responding. Last check: 2007-11-01)
		Anz.com says bracket creep "occurs as companies compensate employees for rising inflation by giving them pay increases, which in turn push the tax-paying employees into higher income tax brackets.
		The pattern depends on the existence of a progressive system of tax, in which marginal tax rates rise with increasing income.
		As one's income is increased to offset inflation, more of one's income will be in the higher of Naifeh's two proposed tax brackets, while the remaining income taxed at zero percent will have less purchasing power.
	hobbsonline.blogspot.com /2002/05/bracket-creep-anz.html (184 words)

	Capital Scene January 28, 1998
		Consider someone who was earning $25,000 a year in 1986 and was in the 15 per cent bracket.
		Under current law the 28 per cent bracket creeps up on single workers at $25,350 and on married couples at $42,350.
		The 15 per cent bracket should be stretched to $35,000 for singles and $50,000 for couples.
	www.nationalreview.com /26jan98/kudlow012698.html (934 words)

	Financial Services: Calculators (Site not responding. Last check: 2007-11-01)
		As your taxable income increases, you are taxed at a higher tax rate as a result of being bumped into a higher income tax bracket.
		To prevent you from being bumped into the next-higher bracket as a result of a cost-of-living wage increase, the IRS adjusts upward the amount of income that can be earned for each tax bracket every year.
		This phenomenon of being bumped into the next-higher tax bracket is sometimes called "bracket creep."
	partners.financenter.com /eecu/learn/guides/itaxbasics/itaxbracket.fcs (295 words)

	Bracket creep details belong to the public, say judges - National - smh.com.au
		THREE High Court judges have expressed disbelief that the Treasurer, Peter Costello, blocked the release of documents about income tax bracket creep by stating it was not in the public interest to release the information.
		Three of the five judges hearing the landmark appeal about the meaning of public interest in the freedom of information law questioned why documents detailing the extent and impact of bracket creep, and its impact on income tax collection, were protected from disclosure by the Treasurer, who issued a "conclusive certificate" stopping their release.
		Along with the bracket creep documents, McKinnon had sought to get reports about the First Home Buyers Scheme, including summaries about the level of fraud in the scheme.
	www.smh.com.au /news/national/bracket-creep-details-belong-to-the-public-say-judges/2006/05/18/1147545460771.html (573 words)

	Search Results for "Bracket"
		...to lowest, and someone whose salary falls within a particular group is said to be in that bracket.
		...Informal A shift of personal income into a higher tax bracket when the taxable income increases over time....
		Nautical A bracket on the mast of a ship to support the trestletrees.
	www.bartleby.com /cgi-bin/texis/webinator/sitesearch?FILTER=&query=Bracket (272 words)

	John Quiggin » Blog Archive » Web site update (Site not responding. Last check: 2007-11-01)
		From a public finance point of view, real bracket creep is a good thing, because, as income rises, so does the demand for the kinds of goods and services usually financed by governments, such as health, education and law and order.
		Nominal bracket creep arises when money incomes are pushed up by inflation, and is definitely a bad thing.
		Both kinds of bracket creep are very convenient for governments since they allow tax revenue to rise invisibly.
	johnquiggin.com /index.php/archives/2005/11/15/web-site-update (388 words)

	SSRN-Falling Up the Stairs: The Effects of 'Bracket Creep' on Household Income by Herwig Immervoll (Site not responding. Last check: 2007-11-01)
		This paper analyzes how inflation-induced erosions of nominally defined amounts built into relevant tax rules ('bracket creep') alter distributional and revenue-generating properties of income taxes and social insurance contributions.
		Using a multi-country tax-benefit model, it provides quantitative estimates for Germany, the Netherlands and the U.K. In the absence of automatic inflation adjustment mechanisms, effects on individual tax burdens can be substantial, even with low inflation.
		Bracket creep is found to reduce tax progressivity.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=679134 (271 words)

	Coming Together - Progressivity in Taxation (Site not responding. Last check: 2007-11-01)
		(This is called "bracket creep.") So while the nation's income has increased at 6.2 percent clip over the past decade, income tax collections have grown by 7.9 percent.
		Any nation with a progressive tax code, then, must enact periodic tax cuts (sometimes handled by automatic adjustments in the brackets) unless it wants the government to collect and spend an ever-larger fraction of the nation's income.
		(The 15% income tax bracket was the lowest income bracket (at the time of the study) for people earning enough money to pay any income tax, so these people are not those with high income.) And these numbers do not include state income taxes for those in states with income tax.
	home.earthlink.net /~steve.dossin/Progressivity.html (646 words)

	AEI - Short Publications (Site not responding. Last check: 2007-11-01)
		The increases are even sharper in the higher tax brackets, with the number of taxpayers in the top 39.6 percent bracket posting a whopping 55.5 percent increase over just those four years.
		If the 15 percent bracket had been expanded along with your income, you would pay fifteen cents tax for each new dollar, but since the bracket was not expanded, you instead pay twenty-eight cents on every dollar.
		If we fight real bracket creep by increasing the top of the 15 percent bracket to, say, $42,000 this year, then even Bill Gates would get a small tax cut on the $1,000 that previously was taxed at the higher rate.
	www.aei.org /publications/pubID.12064/pub_detail.asp (993 words)

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