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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.

When those thresholds are frozen, more income is taxed at higher rates as someone's earnings rise, a process known as fiscal drag.

From BBC

This is what is known as fiscal drag.

From BBC

This is what is known as fiscal drag - not a phrase you'll hear talked about much, but it is important.

From BBC

Despite most of the bands remaining static, more people will pay a higher rate of tax due to "fiscal drag".

From BBC

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

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