The Great Recession had the most severe impact on state tax revenues of any downturn since the Great Depression. We hypothesize that states with more progressive tax structures are more vulnerable to economic downturns, and that progressivity and income volatility may interact to amplify the recession’s fiscal impact. We find that, while potential revenue exposure is greater in more progressive states, the most important source of variation was differences in income concentration and capital gains shares in the top 5 percent of taxpayers.

Periodic changes in occupational classifications make it difficult to obtain consistent measures of social class over time, potentially jeopardizing research on class-based trends. The severity of this problem depends, in part, on the measurement strategies used to address those changes.