In 1985, the U.S. government indexed the federal personal income tax system. With indexing, households are pushed into a higher tax bracket only if their nominal income

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Indexing the federal personal income tax system to inflation means that households will only move into higher tax brackets if their nominal income increases more rapidly than the rate of inflation. This prevents "bracket creep," where inflation alone could push incomes into higher tax brackets without an actual increase in real purchasing power.