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California's gyrating budget: Tax reforms ahead?

EconoMeter looks at alternatives to smooth out revenues in good times and bad


Friday, January 29, 2016

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Kelly Cunningham, National University System
Answer: YES

Tax collections based on income levels significantly fluctuate and increase uncertainty. High rates also drive high-income earners out of the state. Replacing the current system of corporate and income tax codes with consumption-based or flat taxes would not do nearly as much damage per dollar raised since single-rate taxes would not double taxes on savings and invested income. The difference is income would be taxed only one time when earned or only when spent.