"It’s a simple term that indicates … when economic times are good and taxpayers are earning more income, they may be pushed into a higher tax bracket for, in this case, state income taxes," says Dr. Walden. "And so some of their extra income is actually going to be taxed at a higher rate, and the state obviously benefits from that. And that’s one of the reasons why we have seen ... state tax revenues going up quite dramatically.

"Now, it does work in reverse," he adds. "When economic times are bad and people lose income, they are pushed into lower tax brackets. And that can … have adverse effects for the state.

"So what this does, however, it contributes to this instability -- this volatility -- in state tax revenues."

One remedy, Walden says, would be to index the state tax rates to inflation. "That would tend to reduce bracket creep. And in fact this is what the federal government does with the federal income tax."