Indexation

Indexation means:
the process of relating an economic variable to an indicator of some kind, usually inflation. Many items under the federal income tax are indexed to prevent bracket creep (e.g., standard deduction, exemptions, retirement plan limits). See: Index-linked adjustment.

Indenxing is an adjustment to prevent inflation from eroding certain tax benefits including standard deductions, exemption amounts, and the beginning and end of each tax bracket. These are automatically adjusted annually based on increases in the consumer price index (CPI). (Because there was little inflation during the most recent measuring period, little indexing applies applied for 2010 or 2011.)p>.

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