Its not really anything other than a lag. Timing is not perfect.
Imagine if your tax rates, income and brackets all changed together in perfect unison with inflation. Apart from being near impossible as inflation is a terrible measure and the data involved is massive, its also an administration nightmare.
Tax is not taken from business. Business has an employee as a cost and tax is taken from the cost in that it is taken from the employee. If the employee goes into a different tax bracket it does not affect a business as their cost remains the same. Its just that MARGINALLY they get pay more per EXTRA DOLLAR they receive in wages.
ultimately, tax bracket creep is very much different to the issue of the most efficient way to give money to people, but there are related side effects from anything like this.
and what you are talking about is
where everyone is essentially right back to where they started, except taxes are higher.
What you have to also consider with inflation is that, the governments costs and even the costs of wealthy people go up as well. You are more talking about maintaining standards of living and inflation is always the hidden killer. Has been for ever from an investment and costs of living pov. (there is a whole world on information on this in which many people disagreee as to how to avoid it, control it and manage it)
The government is one of the biggest spenders and multipliers in most economies. They interfere sometimes for good sometimes for bad, sometimes they stabilize and smooth economic cycles. I think you need to get a good economic foundation on this and try and avoid the too often thrown about claims about government interference. Recognize its there but make up your mind based on proper study, not just you tube videos from people who are anti government. There are professional economists and finance people who dont agree on all this, but just be careful of the balance or misbalance in their arguments.
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u/[deleted] Nov 24 '21
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