Setting the Record Straight: The Chained CPI and Tax Reform

December 21, 2017

The recently approved tax reform bill, H.R. 1, indexes the newly formed tax brackets using the Chained CPI. This is causing some understandable confusion for NARFE members. However, the tax bill does not change the current index (CPI-W) used to determine annual cost-of-living adjustments (COLAs). 

NARFE strongly opposes using the Chained CPI for determining COLAs to federal and military retirement annuities and Social Security because it would decrease benefits and undermine the true costs facing senior citizens. 

The tax bill ties the tax brackets to the Chained CPI. Using the lower rate of inflation to calculate future tax rates means that taxpayers will more quickly fall into higher tax brackets. However, this does not impact the COLA experienced by seniors. NARFE will continue to oppose any effort to index cost-of-living adjustments to the Chained CPI.


 

National Active and Retired

FEDERAL EMPLOYEES Association

NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.

Setting the Record Straight: The Chained CPI and Tax Reform

December 21, 2017

The recently approved tax reform bill, H.R. 1, indexes the newly formed tax brackets using the Chained CPI. This is causing some understandable confusion for NARFE members. However, the tax bill does not change the current index (CPI-W) used to determine annual cost-of-living adjustments (COLAs). 

NARFE strongly opposes using the Chained CPI for determining COLAs to federal and military retirement annuities and Social Security because it would decrease benefits and undermine the true costs facing senior citizens. 

The tax bill ties the tax brackets to the Chained CPI. Using the lower rate of inflation to calculate future tax rates means that taxpayers will more quickly fall into higher tax brackets. However, this does not impact the COLA experienced by seniors. NARFE will continue to oppose any effort to index cost-of-living adjustments to the Chained CPI.


 

National Active and Retired

FEDERAL EMPLOYEES
Association



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NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.