The personal exemption, the standard deduction,the minimum and maximum dollar amounts for each tax rate bracket, the earned income credit, and the thresholds for the deduction and exemption phaseouts are adjusted annually to offset the effects of inflation. The purpose of this process, referred to as tax indexing, is to remove automatically the influence of inflation from real tax liabilities. This section discusses motivations for tax indexing and whether the US system of indexing is an adequate response to the problems posed by inflation