fiscal drag

noun

1. 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

Example Sentences

This year, with tax increases and sequestration, fiscal drag will be about 1.5 percent of GDP.

From The Daily Beast

What will growth be with fiscal drag at 1.5 percent of GDP, as is currently the case?

From The Daily Beast