As inflation sends the cost of living through the roof, it’s also quietly squeezing Americans on their taxes.

An average New Yorker making around $80,000 a year will be forced to shell out an extra $225 in taxes during this and next year’s tax seasons, according to an analysis prepared for The Post by the Tax Foundation.

That’s because the federal government and a group of 13 states that includes New York, New Jersey and Connecticut have failed to fully adjust their tax brackets for inflation, even as the cost of everything from groceries to gasoline continues to soar nationwide, notching an 8.5% increase in March.

For the calculations, the Washington-based think tank took the example of an employee who made $80,650 in taxable income in 2020. Assuming she got cost-of-living increases in her paycheck to keep up with inflation, her state taxes will soar by the end of 2022 by a total of $132, with the federal bill from the Internal Revenue Service up $93, according to the group.

“Taxpayers have every right to be frustrated,” Jared Walczak, vice president of State Projects at the Tax Foundation, told The Post. “Most states are generating record tax collections.”

“Bracket creep” — CPA lingo for when taxpayers get pushed into higher brackets as governments fail to index income to account for inflation, thereby raising the percentage of total income they pay in taxes — has become a topic of conversation for the first time in decades, policy experts told The Post.

“It’s like the 1980s Kellogg’s commercial — taste it again for the first time,” says James Lucier, managing director at Capital Alpha, a Washington-based policy research outfit. “People are waking up and discovering they have their parents’ tax problems.”

After the double-digit inflation of the 1970s and 1980s, Congress made an effort to address bracket creep at the federal level by adjusting brackets for inflation. Without such adjustments, the cost of inflation for taxpayers at the federal level would be closer to $1,000 this year, according to Walczak.

Still, it takes at least a year for the IRS to adjust the brackets to new inflation levels. Since inflation has jumped from around 2% last year to more than 8% this spring, that lag is squeezing people in the short term, according to the Tax Foundation.

It’s at the state level, however, where some taxpayers may be hardest hit, according to policy experts. In New Jersey and Connecticut, Republican legislators have introduced a bill that would address bracket creep by factoring in inflation to tax brackets. The bills have yet to be voted on.

Last week, New York lawmakers proposed in the state’s annual budget to suspend the state’s gasoline tax for the last six months of the year. Tax experts say such one-off moves don’t come close to the benefits taxpayers would get if brackets were adjusted for inflation.

New York state senator and ranking GOP committee member Tom O’Mara said he’s pushing to make it happen in the next budget, reckoning that preventing further “stealth tax” increases “could save New Yorkers roughly $300 million annually.”

In some states, the failure to adjust for inflation has resulted in tax-bracket tables that are almost comical. In Alabama, the top bracket is $3,000 — a figure introduced in 1935 during the depths of the Great Depression when $3,000 was equivalent to $62,000. There are six states where the top tax bracket kicks in below $10,000 and hasn’t been updated in decades, according to Walczak.

“Bracket creep occurs when inflation pushes taxpayers into higher income tax brackets or reduces the value of credits, deductions, and exemptions. Bracket creep results in an increase in income taxes without an increase in real income. Many tax provisions—both at the federal and state level—are adjusted for inflation.”

Tax Foundation

“The burden falls mostly on lower-income earners,” adds Charles Myers, chairman and founder of the business consulting firm Signum Global Advisors. “Wage gains are diluted by the higher cost of living and higher taxes… sometimes families are net behind despite wage increases.”

Even though some states are trying to change the tax code to address bracket creep, at least some policy watchers are skeptical that policy change will happen soon enough to address the immediate cost of rising inflation.

“Previous Fed Chair Paul Volcker in the 1970s and 1980s cranked rates up so the Fed rate matched the rate of inflation and crushed inflation that way.. Powell is only talking about raising interest rate to 2%-3%,” Lucier says.  

Anthony Bucco, a New Jersey state senator, introduced legislation to index the Garden State’s tax brackets for inflation in 2012. He said he hopes the bill will finally gain momentum as inflation “takes a bite out of wages.”

“Why we’re punishing taxpayers is beyond me,” Bucco said.