Which of the following must be adjusted to index a progressive tax system to inflation?
A) Tax deductions, exemptions, and tax filings.
B) Tax deductions, exemptions, and tax brackets.
C) Tax brackets, tax deductions, and tax payments.
D) Tax brackets, exemptions, and nominal tax receipts.

Question

Quizplus · Accepted Answer

To index a progressive tax system to inflation, tax brackets and deductions/exemptions must be adjusted to ensure that taxpayers do not pay higher taxes solely due to inflation, which can push them into higher tax brackets without an actual increase in real income.

Which of the Following Must Be Adjusted to Index a Progressive