Tax triggers, a series of tax reductions or tax policy changes implemented over time subject to meeting pre-established revenue (or similar) targets, are an increasingly popular mechanism for phasing in tax reform measures subject to revenue availability.

Well-designed triggers limit the volatility and unpredictability associated with any change to revenue codes, and can be a valuable tool for states seeking to balance the economic impetus for tax reform with a governmental need for revenue predictability. Some triggers are designed to target a certain degree of revenue growth, while others operate within a framework of overall reductions or seek to maintain revenue neutrality.

Eleven states and the District of Columbia have turned to tax triggers to implement contingent tax rate reductions or other reforms in recent years, but the designs of these triggers have varied widely.

Baselines, benchmarks, exclusions, and implementation mechanisms all require careful consideration in tax trigger design. Well-designed triggers specify baseline revenue levels and establish meaningful benchmarks which mitigate the influence of year-over-year revenue volatility.

Source:https://taxfoundation.org/designing-tax-triggers-lessons-sta...



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Note added at 1 day 5 hrs (2022-07-31 14:09:16 GMT)
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Erratum: déclencheurs instead of déclrencheurs