Net Investment Income Tax Increasing Over Time
I see the Net Investment Income Tax in the Taxes section and it starts at 0% and keeps increasing. Why is that?
The brackets for the Net Investment Income Tax (NIIT) are not indexed to inflation, as opposed to federal income taxes, which are indexed to inflation. This means that over time more and more people will be paying the NIIT because, generally speaking, incomes move with inflation. As people's nominal income increases, they move into a higher tax bracket for the NIIT.
