- Tax Indexing
- The adjustment of the various rates of taxation done in response to inflation and to avoid bracket creep. Indexing is a method of tying taxes, wages or other rates to an index to preserve the public's purchasing power during periods of inflation. Bracket creep occurs when inflation drives income into higher tax brackets, which result in higher income taxes but no real increase in purchasing power. Tax indexing attempts to eliminate the potential for bracket creep by altering the tax rates before the creep occurs.
During periods of high inflation, bracket creep is likely to occur since tax codes generally do not respond quickly to changing conditions. Tax indexing is meant to provide a proactive solution by using a form of indexation to maintain purchasing power and avoid higher taxation brought on by inflation.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Indexing — 1. The adjustment of the weights of assets in an investment portfolio so that its performance matches that of an index. 2. Linking movements of rates to the performance of an index. 1. Indexing is a passive investment strategy. An investor can… … Investment dictionary
tax indexation — /ˌtæks ɪndɛkˈseɪʃən / (say .taks indek sayshuhn) noun the indexing of tax scales in accordance with certain economic variables such as the consumer price index … Australian English dictionary
Enhanced indexing — In finance, enhanced indexing is a catch all term that describes strategies employed to outperform traditional indexing. Enhanced indexing attempts to generate modest excess returns compared to index funds and other passive management… … Wikipedia
income tax — a tax levied on incomes, esp. an annual government tax on personal incomes. [1790 1800] * * * Levy imposed by public authority on the incomes of persons or corporations within its jurisdiction. In nations with an advanced system of private… … Universalium
Capital gains tax in Australia — Capital Gains Tax (CGT) in Australia applies to the capital gain made on disposal of any asset, except for specific exemptions. The most significant exemption is the family home. Rollover provisions apply to some disposals, one of the most… … Wikipedia
Economic Recovery Tax Act Of 1981 - ERTA — A law that lowered income tax rates and allowed for expensing of depreciable assets. The Economic Recovery Tax Act of 1981 (ERTA) also included several incentives for small business and incentives for saving. The ERTA also provided for automatic… … Investment dictionary
Alternative Minimum Tax — (AMT) is part of the Federal income tax system of the United States. There is an AMT for those who owe personal income tax, and another for corporations owing corporate income tax. Only the AMT for those owing personal income tax is described… … Wikipedia
Economic Recovery Tax Act of 1981 — The Economic Recovery Tax Act of 1981 (also known as ERTA or the Kemp Roth Tax Cut) was A bill to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable … Wikipedia
National Taxpayers Union — Formation 1969 Headquarters Alexandria, Virginia, U.S. Membership 362 … Wikipedia
Political positions of Pat Buchanan on global affairs — Here are some of the views expressed by American conservative political commentator and candidate Pat Buchanan on global affairs.Global affairsNational sovereigntyBuchanan argues that the United States ability to control its own affairs is under… … Wikipedia