Steven Malanga | Two Governors Propose Radical Tax Reform

The interminable fiscal cliff negotiations in Washington produced almost no substantial reform of taxes despite a general agreement that both our income and corporate tax codes are dense, confusing and layered with perverse incentives that favor some economic activities over others at the expense of overall growth.

"The existing tax code makes compliance difficult," IRS Taxpayer Advocate Nina Olson recently wrote, "leaving many [

Just weeks into the new year, however, two governors have decided to raise the stakes in the debate about tax reform in America by proposing to dramatically reshape their state tax systems. Within days of each other Louisiana’s Bobby Jindal and Nebraska’s Dave Heineman recommended eliminating their states’ personal and corporate income taxes, major sources of revenues in both states, and replacing the lost proceeds with additional sales tax revenues (Jindal also wants to dispose of his state’s franchise tax). Both proposals are designed to be revenue-neutral, that is, to generate enough new revenue to replace what the cuts with forego.


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