Tax Reform
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.
Model Policies
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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 …
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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.
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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 …
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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 …
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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 …
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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” …
Press Releases
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Six States Lead the Way in Easing Tax Burdens
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett Email: [email protected] Six States Lead the Way in Easing Tax Burdens ARLINGTON, VA – (MAY 19, 2020) Today, the …
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The States Applaud the New Presidential Budget Proposal
FOR IMMEDIATE RELEASE Contact: Dan Reynolds Email: [email protected] The States Applaud the New Presidential Budget Proposal ARLINGTON, VA – (FEBRUARY 10, 2020) Today, President Donald Trump released his …
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ALEC Legal Center Brings Support for Small Businesses to the Court
Brief filed to hear case regarding over taxation and Commerce Clause
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ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom
FOR IMMEDIATE RELEASE Contact: Daniel Reynolds [email protected] ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom Sound economics recognized by the President …
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Rich States Attract More Residents, Poor States Make Them Leave
Contact: Dan Reynolds [email protected] Rich States Attract Residents, Poor States Make Them Leave ARLINGTON, VA – (April 15, 2019) The American Legislative Exchange Council (ALEC) releases today, Rich States, …
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2018 State Economic Competitiveness Rankings Reveal Upward Standings tied to Federal Tax Reform
FOR IMMEDIATE RELEASE Contact: Anna Tarnawski [email protected] 973-879-2273 Arlington, VA (April 17, 2018) — The American Legislative Exchange Council (ALEC) today released the much anticipated …
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ALEC Submits Amicus Brief to Fight against Online Sales Tax
FOR IMMEDIATE RELEASE Contact: Anna Tarnawski [email protected] 973-879-2273 Arlington, VA (April 04, 2018) – The American Legislative Exchange Council (ALEC) today submitted an Amicus Brief …
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The Big Reveal: ALEC First Look at the Tax Bill
The House Ways and Means Committee released the much-anticipated tax reform legislation that preserves much of the original intent of lowering rates, simplifying the code and making it fairer. “ALEC …
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State and Local Legislators Urge Congress to Eliminate State and Local Tax Deduction in Exchange for Pro-Growth Lower Rates
"Eliminating the state and local tax (SALT) deduction would provide upwards of $1.5 trillion over the next decade to implement broad-based tax cuts nationally. This overhaul would spur the growth in economic output needed to jolt business investment, personal income growth, and job growth."
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ALEC Applauds Federal Tax Reform Framework
As a nation, we have fallen behind in competitiveness – just by standing still. As the rest of the world has reduced taxes on employers, our job creators pay some …
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New Report Analyzes Governors’ Economic Policy Proposals
FOR IMMEDIATE RELEASE Contact: Taylor McCarty [email protected] 734-752-5646 New Report Analyzes Governors’ Economic Policy Proposals State of the State addresses reveal free market …
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Annual Report Highlights Nine States That Cut Taxes in 2016
For Immediate Release Contact: Taylor McCarty [email protected] 202-309-1274 Arlington, VA (March 1, 2017)—Nine states substantially cut taxes in the 2016 legislative session, according to a …
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2016 State Economic Competitiveness Index Reveals National Pro-Growth Trend
North Carolina, North Dakota, Wyoming and Arizona among top states; New York, Vermont, New Jersey, Connecticut and California rank last
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New Report Highlights 17 States That Cut Taxes in 2015
Seventeen states cut taxes in the 2015 legislative year, matching a high-water mark that was first reached in 2013, according to a new report by the Center for State Fiscal Reform at the American Legislative Exchange Council (ALEC).
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NFIB: Report Confirms 2012 Tax Cuts Put Kansas Back on Track
TOPEKA, Jan. 21, 2016–Dan Murray, state director of the National Federation of Independent Business, released the following statement today in response to strong showing by Kansas in the 8th edition …