Bracket creep: when inflation rises faster than your wage growth, your nominal income crosses a bracket threshold — but your real purchasing power fell. You pay a higher marginal rate on dollars that buy less. Your real income went down. Your tax burden went up. The government captured a larger ...

The IRS uses the Chained CPI (C-CPI) to adjust brackets. For 2026: ~2.7% average adjustment. The C-CPI problem: it assumes you substitute cheaper goods when prices rise. Steak → chicken → eggs. This consistently produces a lower measured inflation rate than what households actually experience. ...

Capital gains are not inflation-indexed at all. Buy an asset for $10,000 in 2015. Sell for $20,000 in 2025 — you nominally doubled your money. If the dollar lost 40% of its purchasing power in that period, your real gain is much smaller. You still owe tax on the full $10,000 nominal gain. The go...

Why doesn't Congress fix this? Fully indexing for inflation — including capital gains — reduces revenue. They'd need to find it elsewhere or cut deficits. Neither is politically easy. So inflation does the fiscal work that explicit tax hikes would require. No vote needed. Bracket creep is a fe...