Alan Auerbach Says Consumption Tax Less Volatile than Income Tax

-Reuters, June 9, 2011 by Jim Christie
http://www.reuters.com/article/2011/06/09/us-california-taxsystem-idUSTRE75862T20110609

California could reduce its revenue volatility and improve its business climate by moving toward a greater reliance on consumption taxes … according to the Public Policy Institute of California report…. Revenue volatility is working in California’s favor at the moment, said Alan Auerbach, author of the institute’s report. “It’s one of the reasons why revenues have been going up so quickly.”

-Capital Public Radio, Insight, June 14, 2011 Host Jeffrey Callison
http://bit.ly/lDz1Ss

“Our income tax has become more and more important, and that’s a problem for two reasons. One is that it leads to an enormous amount of volatility in state revenues, which we’ve experienced every time we’ve had a recession; and also it discourages production in California because it’s a tax based on earning income in California.”