# Progression, cold (sly progressive taxation)

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- Post ID: 593162
- Modified: 2023-07-25T21:11:53+00:00
- Language: en

## Definition

If the income tax rate is not continuously adjusted, an increase in income to compensate for inflation leads to a higher tax rate (progression effect: the increase in the tax rate as the size of the tax base increases) and thus to a higher tax burden, even though the income with purchasing power remains the same. In Switzerland, therefore, the legislator is bound to compensate for the cold progression; in Germany, this has not yet been achieved. - The ECB calculates the cold progression in the course of the two-pillar principle. - Cf. Monthly Report of the Deutsche Bundesbank of March 2006, p. 67 (formula), p. 74 f. (progression effect on payroll taxes). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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