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Managing Fiscal Volatility by Redefining ‘Tax Cuts’ and ‘Tax Hikes’

12 Pages Posted: 12 Oct 2010  

David Gamage

Indiana University Maurer School of Law

Jeremy Bearer-Friend

University of California at Berkeley

Abstract

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

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

David Gamage (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

HOME PAGE: http://www.law.indiana.edu/about/people/bio.php?name=gamage-david

Jeremy Bearer-Friend

University of California at Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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