"Bracket creep" is avoided by:
A) Use of sunset provisions.
B) Providing special tax rules for small businesses.
C) The statute of limitations.
D) Adjusting the rate brackets for inflation annually

Question

Quizplus · Accepted Answer

"Bracket creep" refers to the phenomenon in which an increase in income, which should result in a person moving into a higher tax bracket, instead leads to a decrease in purchasing power due to inflation. This can happen if the tax rate brackets are not adjusted for inflation regularly. Therefore, adjusting the rate brackets for inflation annually helps avoid bracket creep. Sunset provisions are a way of automatically terminating a law or tax regulation after a set period of time unless new legislation is enacted to extend it. Special tax rules for small businesses and the statute of limitations are not directly related to avoiding bracket creep.

"Bracket Creep" Is Avoided By