fiscal drag

fiscal drag definition - business

fiscal drag

The tendency of tax revenues to rise as a share of GNP during economic expansions, thereby slowing the growth of demand for goods and services. Fiscal drag results from progressive tax rates that rake off higher percentages of income as the economy expands.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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