Cost effective Government - Indexing taxes for inflation

Transparency is crucial to cost effective government.  One of the primary drivers of increasing tax revenues are the hidden taxes that arise from bracket creep.  Suppose you make $40,000 a year.  Suppose the tax code taxes income up to $40,000 at the rate of 20% while income above $40,000 is taxed at 25%.

Now suppose 10 years later, after 10 years of inflation of 1%, you now make $44,000.  In real dollars your income is unchanged, you just kept up with inflation.  But you now are paying 25% tax on that additional $4,000 in income to make up for inflation.  So in effect you have had your taxes raised by $200 a year although the politicans you vote for did nothing.

That's bracket creep.  It was a huge problem back in the 1970's when inflation was rampant.  Bracket creep undermines taxpayer confidence in government.  No income based tax should be enacted that is not indexed to account for inflation.