September 16, 2009
South Florida Business Journal Highlights Tax Foundation Predictions for 2010 Tax Parameters
"Inflation adjustments won't increase take-home pay"
By South Florida Business Journal
Expecting an increase in take-home pay this January due to the annual automatic inflation adjustments? You can forget about it, according to a Tax Foundation analysis of Bureau of Labor Statistics (BLS) data published Wednesday.
The Consumer Price Index year-over-year monthly average increased by only 0.19 percent—the smallest inflation adjustment since the Internal Revenue Service began adjusting the tax code for inflation. This comes just a year after the biggest increase in nearly two decades, Tax Foundation noted.
"The past two years mark two extremes, one high and one low, ever since inflation adjustments became part of the individual income tax in the mid-1980s," Tax Foundation Senior Economist Gerald Prante said in a statement. "Last year, tax parameters like the standard deduction and tax brackets increased substantially in value, while this year they are increasing very little or not at all."
