12 Pages Posted: 12 Oct 2010
This report analyzes how states should cope with fiscal volatility at the level of institutional-design policy. We propose that states reconsider how they define terms like ‘‘tax cuts’’ and ‘‘tax hikes.’’ By adopting a new baseline for defining those terms, states can increase the likelihood of using tax rate adjustments to cope with fiscal volatility rather than more harmful spending fluctuations.
Keywords: Fiscal Volatility
Suggested Citation: Suggested Citation
Gamage, David and Bearer-Friend, Jeremy, Managing Fiscal Volatility by Redefining ‘Tax Cuts’ and ‘Tax Hikes’. State Tax Notes, Vol. 58, No. 2, 2010; UC Berkeley Public Law Research Paper No. 1690614. Available at SSRN: https://ssrn.com/abstract=1690614