Monday Map: Adjustment of State Income Tax Brackets for Inflation

July 9, 2012

Today's Monday Map touches on a lesser known, but still important, aspect of state tax policy – it shows which states index their income tax brackets for inflation.

Indexation of tax brackets is important for stable tax policy – otherwise, as nominal incomes rise, more and more taxpayers end up in higher tax brackets and pay higher rates, even if the real value of their income remains flat. The federal income tax code has had most of its parameters indexed for inflation since 1986, yet many states lag behind.

Click on the map to enlarge it.

View previous Monday Maps here.

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