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Bracket Creep

The edging into higher tax brackets that occurs as income rises with inflation. Bracket creep increases government revenue without tax increases. The Tax Reform Act of 1986 virtually ended bracket creep by taxing individuals in only two brackets beginning in 1988 and adjusting the brackets for inflation after 1988. Subsequent tax acts, however, have increased the number of brackets.

U.S. and other Developed Countries International Tax Meaning

Term used in connection with graduated system of taxation to refer, for example, to the slabs or slices of taxable income subject to particular rates of income tax.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.

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