Revenue diversification and balanced use of revenue sources have long been held as desirable policy aims by many tax policy analysts, especially the Advisory Commission on Intergovernmental Relations. Ladd and Weist asserted that revenue balance is not a valid policy goal in and of itself. The...

This paper defines the relationship between the nominal (or money) income elasticity and the real income elasticity of a tax system. Under most circumstances, the real and the nominal income elasticities differ. This difference has not been recognized by economists who rely strictly on nominal...