Topics
Fiscal Drag
Fiscal drag is a phenomenon that occurs when inflation pushes taxpayers into higher income tax brackets, resulting in higher tax payments. Fiscal drag can occur because most tax systems use fixed income brackets, which means that as a taxpayer's income increases due to inflation, a larger portion of their income may be subject to higher tax rates. This can lead to an increase in tax revenue for the government, even if tax rates have not been changed.
Fiscal drag can be seen as a form of stealth taxation, as it can result in higher tax payments without the need for explicit tax rate increases.
See also
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Fiscal Drag: The Stealth Tax Strategy Impacting Your Wallet
4th August 2024
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Scottish Government Raises Taxes for Higher Earners
19th December 2023
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Drag on Incomes from Fiscal Drag equivalent to a 5% tax rise
8th October 2023
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Fiscal Policy - Explaining Automatic Stabilisers
Topic Videos
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Kahoot and Quizlet Resources on Fiscal Policy
25th April 2023
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What are national insurance contributions?
23rd February 2022
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Fiscal Policy - Impact of Tax Rises (Revision Essay Plan)
Practice Exam Questions
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Economics of Fiscal Drag
Topic Videos
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The 2021 Budget at a Glance
3rd March 2021
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Evaluating Fiscal Policy (Online Lesson)
Online Lessons
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Fiscal Policy (Revision Presentation)
Teaching PowerPoints