Over the years our society has indexed a number of things--Social Security is indexed to the consumer prices, ETF's are indexed to various indices, income tax rates are indexed to consumer prices, etc. Some social programs are means-tested and indexed to income.
An index has two advantages IMO: it allows for gradual changes and it establishes a linkage between social factors. The gradual change is important: big changes get more recognition than gradual ones. And psychology tells us that people get upset by the perception of loss, an upset which isn't balanced by their appreciation of gains. "Graduating" has similar effects.
I think we, especially liberals, should take more advantage of indexing. For example, in 1993 the Clinton administration backed off its energy tax because of opposition from rural Democrats, particularly senators, and saw an increase in the gas tax as a fallback. But what we should have done is index the gas tax to inflation. The effect would have been roughly to double the value of the tax.
Another example: Obamacare was passed with a mandate, a financial penalty for not enrolling. What would have happened if we had graduated the penalty, Lessening the initial pain might have enabled the mandate to be preserved, instead of repealed by a Republican Congress.
