Using Bracket Creep to Raise Revenue: A Bad Idea Whose Time Has Passed
Temporarily suspending indexation of the personal income-tax code is often suggested as a means for raising federal revenues. Here, the authors argue that this method of taxation is inefficient in that it is inferior to direct increases in marginal tax rates. They conclude that attempts to use bracket creep in future deficit-reduction efforts should be viewed with appropriate skepticism.
Suggested citation: Altig, David, and Charles Carlstrom. “Using Bracket Creep to Raise Revenue: A Bad Idea Whose Time Has Passed,” Federal Reserve Bank of Cleveland, Economic Review, vol. 29, no. 2, pp. 02-11, 06.01.1993.