The CEA is the White House Council of Economic Advisers, an Executive Office agency that provides the President with economic research, objective analysis, and policy advice; it authors research papers like this one to evaluate policy options and quantify likely economic effects for the administration.
Broadening the sales‑tax base means taxing many items and services that are currently exempt (for example, more services, consumer purchases now exempted like some groceries or digital services) so the tax applies to a larger share of final consumption; that lets a lower or single sales rate raise the same revenue but shifts which transactions are taxed and can reduce tax pyramiding if business inputs remain excluded.
Spending‑growth limits are rules (statutory or constitutional) that cap how fast state spending can rise—commonly tied to inflation plus population growth (TABOR‑style) or set as fixed annual growth ceilings; they are enforced by law or ballot requirements and implemented through appropriations rules, vetoes, or triggers that require tax/transfer changes or supermajority votes to exceed limits.
Shifting revenue from income taxes to broader sales taxes tends to be regressive: low‑ and middle‑income households spend a larger share of income on consumption so their effective state tax rate usually rises more than for high‑income households, while high earners gain from no income tax and from migration effects—but the net distribution depends on rate design, exemptions, and any offsetting credits or spending limits.
The CEA paper reports state‑by‑state quantitative estimates using an economic model that links tax changes to outcomes (GDP, wages, startups, migration) and calculates the sales tax rates needed under two scenarios; the paper says it applies empirical elasticities and literature estimates and runs the model for each state to derive multi‑year effects (CEA report provides the model appendix and state computations). The report is the source for the time horizon and elasticity assumptions (see paper appendix/methods in the PDF).
States most likely to consider eliminating income tax are those already debating cuts or with no personal income tax (Texas, Florida, Tennessee, etc.); politically, Republican‑controlled legislatures and ballot measures make elimination easier, while barriers include state constitutional provisions, dedicated income‑tax revenue uses, supermajority or referendum requirements, federal constraints (e.g., nexus rules), and the political difficulty of enacting broad sales‑tax base changes and spending limits.
Both residents and nonresident visitors bear sales tax burden. States can capture some tax from visitors (tourism and cross‑border shoppers), but most sales‑tax revenue comes from residents’ consumption; how much visitors pay affects revenue projections and depends on tourism share, cross‑border shopping patterns, and which goods/services are taxed.