The dangers of the chained CPI

From the Daily Kos blog.

According to Congress' Joint Committee on Taxation, if individual income taxes had been indexed to the chained CPI starting four months ago, by 2021, 69 percent of the gains in revenue would come from taxpayers with incomes below $100,000, while those in the highest income brackets would barely be affected. For example, workers with incomes between $10,000 and $20,000 would experience an increased tax burden of 14.5 percent, while those with incomes over $1 million would just see an increase of 0.1 percent.

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That's because many elements of the federal tax code - including tax brackets, personal exemptions, standard deductions, limits on contributions to 401(k) plans and similar accounts, and key parameters of the earned income and child tax credits - are also adjusted annually for the CPI. "A switch to the chained CPI would raise an additional $124 billion of tax revenue through 2023, according to the Congressional Budget Office."