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.

Publications

  • 2016 State of the States Cover Image

    State of the States 2016

    This report observes and analyzes the economic policy proposals discussed in each governor’s State of the State address.
  • 2016 RSPS cover

    Rich States, Poor States, 9th Edition

    The 9th Edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index reveals a pro-growth trend across the nation …
  • Front cover

    State Tax Cut Roundup: 2015 Legislative Session

    The 2015 legislative session featured a notable number of states achieving tax relief and tax reform for their citizens. Pro-growth …
  • RSPS_8th_Edition cover

    Rich States, Poor States, 8th Edition

    Throughout the country, states are looking for ways to energize their economies and become more competitive. Each state confronts this …
  • 2015-State-Factor_-Charitable-Giving-Cover

    State Factor: Charitable Giving

    State Factor: The Effect of State Taxes on Charitable Giving According to the new report, The Effect of State Taxes on …
  • Screen Shot 2015-11-13 at 1.23.50 PM

    State of the States: An Analysis of the 2015 Governors’ Addresses

    Each year, governors across the nation give a state-of-the-state address to communicate to their constituents what they did—or did not—accomplish …
+ All Tax Reform Publications

Model Policies

  • 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” …

  • Uniform Standard for Lodging Taxes Act Final

    Section 1.  Definitions [Appropriately designated section number] of the statutes is created to read: (1) “Hotel” means any structure or space, or any portion thereof, that: (a)  Is occupied, or intended or designed for occupancy, by transients for dwelling, lodging, or sleeping purposes; and (b)  Accepts on-site reservations for accommodations; …

  • Proclamation Recognizing Tax Freedom Day Draft

    Whereas, 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 Whereas, 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 to own …

  • Resolution in Favor of Tangible Personal Property Tax Repeal Final

    WHEREAS, personal property taxes are ad valorem taxes on all property other than real property (i.e., property that is unaffixed or movable); and WHEREAS, though the name suggests that personal property taxes are paid by individuals, the majority of the tax liability falls on business due to the broad exemptions …

  • Resolution in Support of Non-Discriminatory Property Tax Policies Final

    WHEREAS, American consumers have come to rely on high speed communications networks constructed by communications providers to improve their overall quality of life including in the areas of healthcare, education, business, emergency services, and other purposes; and WHEREAS, communications providers must make sizeable investments to keep pace with consumer demand …

+ All Tax Reform Model Policies

Task Forces

Tax and Fiscal Policy

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

Press Releases

+ All Tax Reform Press Releases