Tax revenues would skyrocket if the tax cuts expire, due to “bracket creep.” Average incomes are higher today than in the 1990s, but income-tax brackets aren’t adjusted for the growth of earnings. As a result, Americans will shift into higher tax brackets and pay a greater share of their incomes in taxes. [emphasis added]
Via Greg Mankiw, who for inscrutable reasons calls this “reporting.”
Of course, tax brackets (with the notable exception of those of the Alternative Minimum Tax) now are indexed for growth in prices, at least to the extent that’s measured by CPI. Really, this is part of a broader attack on progressive taxation, as you can see from an earlier effort along these lines by AEI über-hack Kevin Hassett of Dow 36,000 fame. Though I suppose there may be some positive side effects for society if the AEI’s paymasters had to allow enough trickle-down to keep average wage growth ahead of CPI.