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fiscal drag
noun
- economics the process by which, during inflation, rising incomes draw people into higher tax brackets, so that their real incomes may fall; this acts as a restraint on the expansion of the economy
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Example Sentences
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This is what is known as fiscal drag.
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This is what is known as fiscal drag - not a phrase you'll hear talked about much, but it is important.
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But the policy amounts to a tax rise because of a process called "fiscal drag", which sees more people "dragged" into paying higher rates of tax as wages rises.
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Despite most of the bands remaining static, more people will pay a higher rate of tax due to "fiscal drag".
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Despite most of the bands remaining static, more people would pay a higher rate of tax through a process known as fiscal drag.
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