Fiscal Drag: The Hidden Tax Draining Your Wallet!

Excellent. So this is a great question. Fiscal drag is when your income goes up, usually to try to keep pace with inflation. But tax thresholds stay frozen. So you you end up getting dragged into higher tax brackets, even though your buying power hasn't really increased because inflation is eating away at a higher pay anyway. So it makes you feel a bit poorer. And really you get more cash, but you can't really buy more. So it's a hidden tax sort of, that reduces your take home pay. But there's a bit of a good news there, just a tiny bit from 2028, 2029 tax say the tax threshold will start adjusting with inflation and that could ease some of the pressures. However, I wish they implemented it immediately, just like they did with the other increasing tax policies like capital gains and stamp duty land tax that we're going to address here as well in this video.