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Because they haven’t adjusted the amounts for the tax brackets with inflation. So it’s a double whammy. Your money is worth less, even though you got more of it
by jtbayly 5y ago
Because they haven’t adjusted the amounts for the tax brackets with inflation. So it’s a double whammy. Your money is worth less, even though you got more of it. And now Uncle Sam is taking more of it.
- Stupulous 5y agoI cannot figure out why the US writes laws in terms of nominal value while maintaining an inflationary currency. The majority of lawmakers agree that a law should be x with respect to the current value of USD, why don't they also agree it should be x+inflation for a future value of USD? Maybe with a circuit breaker for hyperinflation. They don't have to rely on third party inflation numbers, because the Fed is a government agency. Do some lawmakers only support a law because it will have a lower (min. wage) or higher (tax) real monetary significance in the future?
- jtbayly 5y agoProbably, even if it is only accidentally. The Congressional Budget Office produces long-term estimates on things, and I'm guessing they aren't ignoring inflation. So, for example, a proposed law has $X ramification, according to the CBO, over the course of 10 years where X is an acceptable amount. If you were to adjust to make the law account for inflation, X would change, potentially into something not acceptable.