Measuring the Effects of Bracket Creep Since the 2009 Tax Reform. A Comment

In a progressive income tax system the average tax rate increases as the taxable amount increases. When the tax system does not account for inflation, an additional tax burden arises, which is commonly referred to as bracket creep. The present commentary critically compares four different studies, which calculate the fiscal effect of bracket creep in Austria between 2010 and 2013. In the comparison, we point at potential biases of the estimation methods and discuss advantages and disadvantages of the data sets used. To a large extent, the great differences in the results of the four studies can be explained by taking into account these aspects.