fiscal drag

British

noun

economics the process by which, during inflation, rising incomes draw people into higher tax brackets, so that their real incomes may fall; this acts as a restraint on the expansion of the economy

"Collins English Dictionary — Complete & Unabridged" 2012 Digital Edition © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012

Example Sentences

Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.

See Examples For:

fiscal drag

This is what is known as fiscal drag.

From BBC ● Apr. 6, 2025

Despite most of the bands remaining static, more people would pay a higher rate of tax through a process known as fiscal drag.

From BBC ● Dec. 4, 2024

The effect is known as "fiscal drag" as it drags more people into paying tax in the first place, and others into higher tax bands.

From BBC ● May 30, 2024

Meanwhile, fiscal drag - as well as rising minimum pay rates - mean somebody working 35 hours a week on the minimum wage is now having to pay tax on almost £8,300 of their earnings.

From BBC ● Apr. 4, 2024

It's got a horrible technical name - "fiscal drag" - and it can have a horrible impact on earners too.

From BBC ● Nov. 12, 2022

Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023