The Center for California Studies has released another Faculty Research Fellows report, “An Analysis of a Consumption Tax for California”. The report was written by Dr. Fred E. Foldvary, Dr. Colleen E. Haight, and Dr. Annette Nellen, all of California State University, San Jose.
This study attempts to answer the question: should California broaden its use of a consumption tax, and if so, how? In considering this question, the authors also considered the ultimate purpose of a system of taxation: namely to raise sufficient revenues to support the spending goals of the state in the most efficient manner.
Recent tax reform proposals in California have included a business net receipts tax (BNRT), as well as a more comprehensive sales tax. However, though the timing is right, given the increasingly global and digital nature of California’s economy, the recent 2008 recession tabled the discussion in favor of more urgent matters. This study revisits the idea of tax reform specifically considering the role of consumption taxes, both in their traditional forms (such as a sales tax) a well as alternative forms (including formula approaches and Pigouvian taxes).
The report in its entirety can be found on our website:
For more information on the Faculty Research Fellows Program and to find out about upcoming research opportunities visit: