Previewing Tax Reform in the States: National Trends and State-specific Prospects for 2013


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Following an election that left half the states with veto-proof legislative majorities, 39 states with one-party rule and more than a dozen with governors who put tax reform high on their agendas, 2013 promises to be a big year for changes to state tax laws, and that could end up being a good thing. From the National Governors Association to the State Budget Crisis Taskforce, there is widespread consensus that most states have been patching and punting for too long and their tax systems are no longer able to provide adequate and sustainable revenue to deliver services that citizens rely on.

But it could also be a bad thing. As an historic number of states gear up for major tax changes, we know that Grover Norquist is targeting the states and Arthur Laffer is getting some new clients. There needs to be a real policy discussion in the states that helps people understand there’s a smart way to do tax reform, that it can’t just mean cuts, and that reform has wide ranging, long term consequences.

Enter the Institute on Taxation and Economic Policy (ITEP), CTJ's partner organization. They hosted a phone briefing on December 19, 2012 outlining challenges and solutions with a focus on state tax fairness, and going into greater depth on fifteen states most likely to undertake major tax overhauls in 2013 (CA, IA, KS, KY, LA, MN, MO, NC, NE, NY, OH, OK, OR, VA, WI). As the new legislative sesions get underway, ITEP will be monitoring proposals as they develop and will run them through the microsimulation model to see how their costs and benefits get distributed across different groups of taxpayers.

Right now, however, you can read over the briefing materials and listen to the 30 minute presentation from ITEP's state policy experts. It's all at this link.

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