States considering innovating their tax codes

TOPEKA — The latest legislative thinking goes like this: The states with the most innovative tax codes will emerge from the economic downturn first and be in the best position to compete for jobs.

It’s an arms race in which the weapons are levies and loopholes, and the battlefields are committee rooms in Topeka and Jefferson City.

There is no shortage of ideas.

"A simplified tax structure is one of the most basic tools we can incorporate in restarting our economy," said state Rep. Arlen Siegfreid, an Olathe Republican. "The quicker we move on changing our tax system the more quickly Kansas will rebound from the doldrums it’s in."

Elsewhere, states are angling to put their best tax foot forward now that the recession is “officially” over.

Georgia has a new task force responsible for making its tax structure more competitive. Voters in Washington state face a November referendum on a proposal to increase taxes on high earners in exchange for lower taxes on everyone else. Several other states are considering the so-called Fair Tax, which would replace income taxes with an expanded sales tax.

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