It wasn't pretty. But at least we no longer face bracket creep.
But there is no indexing for capital gains. If you bought an asset for $100,000 30 years ago you would have to sell it for $210,000 today to break even. But you owe capital "gains" tax on $110,000 "gain"!!
Born in 1965, so yeah I remember this.
Since the bracket indexing depends on the index, and we know the government is fiddling with what's in the index, I suspect that the brackets will fall behind (possibly not as much as they did then).
My older brother bought his first house in the early 80s and the interest rate was 12.5%. He was just grousing to me about it because I bought a house in Spain and the interest rate is 1.5%.
Of course we still face bracket creep. The 'official' inflation number is 8.6%. The current ShadowStats number, which uses the 1980 methodology, is at 16.8%. Trust me, the difference is bracket creep.
The first car I bought myself was a Ford Escort in fall 1981. It cost around $6,000. My interest rate was 17.8 percent. The car I have now, a Mazda 2, cost around $13,000 in 2011 but with no interest. If things continue the way they’re going, I’m afraid that next time there will be no offset.