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

In the News

West Virginia Economic Rankings, North Carolina Veto Override, and TABOR Defense in Colorado: Jonathan Williams on The Hugh Hewitt Show

Jonathan Williams/June 8, 2026
Tax Reform

Arizona’s Choice on Federal Tax Conformity

In the News

North Carolina Constitutional Amendments, Michigan Property Tax Reform, and More: Jonathan Williams on The Hugh Hewitt Show

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Publications

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Model Policies

  • Proclamation Recognizing Tax Freedom Day Draft

    WHERAS, Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden, and WHERAS, Americans will collectively spend more on taxes in [Insert Current Year] than they will on food,…

  • An Ordinance to Repeal Personal Property Tax Collection Draft

    WHEREAS, Ordinance No. [Insert number], passed on [Insert date], established personal property tax collection in [Insert Jurisdiction], and WHEREAS, the [Insert State] [insert state statute] has given [Insert Jurisdiction] the option not collect personal property taxes, and WHEREAS, personal property taxes make it impossible for businesses and citizens town their…

  • State Constitutional Amendment To Oppose New State Taxes, Increased Spending, and Debt Without Voter Approval Final

    WHEREAS, States through their respective constitutional amendment processes should adopt fiscal responsibility amendments that (I) impose limits on the amount of money government can tax and spend, (II) tie the growth of state revenue to a rate of population growth plus inflation, and (III) require any increases above an established…

  • Resolution Recognizing The Seriousness Of The National Debt And Its Threat To National Security Final

    WHEREAS, In March 2025, the outstanding public debt of the U.S. totaled more than $36 trillion, with public debt equaling 124 percent of gross domestic product and the debt owed per citizen rising to $107,000; WHEREAS, More than $8 trillion of the federal debt is owned by individuals not located…

  • Health Care Sharing Ministries Tax Parity Act Final

    Section 1. Short Title. This Act shall be known as the “Health Care Sharing Ministries Tax Parity Act.” Section 2. Definitions. As used in this Act, the following definitions apply: (A) “Health care sharing ministry” has the meaning set forth in {insert existing state code} {Drafting Note: The following language…

  • Taxpayer Transparency Act Final

    Be it enacted by the Legislature of the [COUNTY] as follows: Section I. [Chapter] of the Code of [COUNTY] is hereby added as provided hereinafter: TAXPAYER TRANSPARENCY 1 Title. 2 Legislative intent. 3 Definitions. 4 Searchable budget database website created. 5 Updates. 6 Compliance with Act. 7 Electronic public access…

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Task Forces

Tax and Fiscal Policy Task Force

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

Press Releases

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