Tax Reform

Key Points
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Key Points
  • A vibrant, growing economy allows businesses and households to flourish.
  • A state’s economic vitality starts with a principled tax code that is fair, transparent and competitive relative to other states.
  • Over the past decade, the nine states without a personal income tax have consistently outperformed the nine states with the highest taxes on personal income – in job creation, population growth and even tax revenues.
  • With the right set of policies in place, lower-tax states can attract much-needed human and financial capital from higher-tax states that penalize wealth creation. 

Mainstream economists, small business owners and taxpayers across the country understand that growth-oriented reforms mean increased opportunity for all. As demonstrated by the annual Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, sound tax and fiscal policies are critical to economic health, allowing businesses and households to flourish.

A dynamic state economy starts with a principled tax code. As noted in the ALEC Principles of Taxation, state tax codes should be fair, transparent and economically neutral. Low, competitive tax rates on a broad tax base offer a level playing field to all. In this environment, more residents will benefit from greater economic growth.

The advantages of a low-tax environment are clear. Over the past decade, the nine states without a personal income tax have consistently outperformed the nine states with the highest taxes on personal income. Similarly, those states with no income tax saw their population rise 109 percent faster than their high-tax counterparts. In those same ten years, job growth in states with no income tax increased 130 percent faster versus the states with the highest income taxes. Even state and local tax revenues in the nine states without income taxes grew 51 percent faster. While other factors have surely played a role, these general trends held true decade after decade for the past half-century.

As the research overwhelmingly shows, competitive tax and fiscal policies are vital to a state’s future. With the right set of policies in place, lower-tax states can attract much-needed human and financial capital from higher-tax states that penalize wealth creation.

Articles

Tax Reform

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Skip Estes/April 8, 2021
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Publications

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Model Policies

  • Net Operating Loss Reform Act Final

    Section 1. Adopt the Net Operating Loss Provisions of the Internal Revenue Code as amended by the Coronavirus Aid, Relief and Economic Security (CARES) Act in Response to COVID-19 Pandemic. [INSERT STATE] is to adopt or otherwise conform to the federal CARES Act’s Temporary Repeal of Taxable Income Limitation contained …

  • Property Tax Appraisal Reform Act Final

    SECTION 1 Amends [INSERT STATE] Tax Code, as follows: If the appraised value of property in a tax year is lowered upon taxpayer appeal, the appraised value of the property as finally determined under that determination is considered to be the appraised value of the property for that tax year.

  • Truth in Taxation Act Final

    As used in this section: (1) “Taxing subdivision” means any political subdivision of the state that levies an ad valorem tax on property. (2) “Revenue neutral rate” means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year …

  • Statement of Principles on Truth in Property Taxation Final

    Guiding Principles: Utah’s Example Utah enacted its Truth in Taxation law in 1985 to provide a solution to taxpayer unrest from ever-increasing property taxes. Accountability – While Utah’s law does not limit property taxes, it makes local elected officials think twice about increasing property tax rates. Citizens will be notified …

  • Resolution Urging Congress to Cut the Federal Corporate Tax Rate Final

    Model Resolution: WHEREAS, it is the mission of the American Legislative Exchange Council to advance Jeffersonian principles of free markets, limited government, federalism, and individual liberty, and WHEREAS, at a combined federal-state rate of 38.9 percent, the United States imposes the highest overall corporate tax rates in the industrialized world, much higher …

  • An Act Relating to Online Lodging Marketplaces – Establishing Statewide Standards, Protecting Privacy, and Enabling Efficient Tax Remittance Final

    Section 1 – Definitions “Lodging Marketplace” means a person that provides a platform through which an Unaffiliated Third Party offers to rent a Vacation Rental or Short-Term Rental to an occupant and collects the consideration for the rental from the occupant. For the purposes of this paragraph: “Unaffiliated Third Party” …

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Task Forces

Tax and Fiscal Policy

The ALEC Tax and Fiscal Policy Task Force is dedicated to researching and promoting sound policy aimed at creating a …

Press Releases

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