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

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fiscal drag

Most significant is fiscal drag, where the thresholds that apply to different rates of tax on income are frozen.

From BBC ● Mar. 3, 2026

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

We'll have more on that so-called "fiscal drag" from our chief economics correspondent, Dharshini David, next.

From BBC ● Mar. 6, 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

When income tax brackets do not move with inflation it is known as "fiscal drag".

From BBC ● Jun. 30, 2022

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