Taxpayers living in at least 22 states could face higher taxes as a result of stubbornly high inflation, a phenomenon that is known as 'bracket creep.'
Fox News Contributor Jonas Max Ferris and Quill Intelligence CEO Danielle DiMartino discuss the population exodus from Democrat states to GOP states over taxes, cost of living and crime on 'Cavuto Live'.as a result of stubbornly high inflation.
That's because of a phenomenon known as "bracket creep," which happens when taxpayers are pushed into higher-income brackets even though their purchasing power is essentially unchanged due to steeper prices for most goods. for inflation, a recent analysis published by the Tax Foundation shows that 15 states fail to account for inflation when drawing the brackets for taxes on wages and income. An additional 18 states do not index personal exemption tax to inflation.
Altogether, 22 states have at least "one major unindexed provision," which could mean higher taxes for millions of taxpayers who are already confronting the steepest inflation in decades.
The so-called "hidden tax" is most likely to affect residents living in states where taxes are not indexed to inflation, meaning there's no automaticbuilt into the tax provision in order to keep pace with inflation. States with an income tax that is not indexed to inflation are: Alabama, Connecticut, Delaware, Georgia, Hawaii, Kansas, Louisiana, Maryland, Mississippi, New Jersey, New Mexico, New York and Oklahoma.
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