The phenomenon where inflation pushes taxpayers into higher income tax brackets, resulting in an increase in their tax burden without any actual increase in their real purchasing power, is known as ___.

Answer: bracket creep (or fiscal drag)

Bracket creep occurs in progressive tax systems where tax brackets are not indexed to inflation. As nominal wages rise merely to keep pace with inflation, individuals are pushed into higher marginal tax rates. This stealthily increases government revenue at the expense of the taxpayer's real disposable income, acting as a hidden tax.