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States lower taxes to remain competitive

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Breanna Deutsch Contributor
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A growing number of states are beginning to understand that in order to win you need to be competitive. The latest competition is who can have the lowest taxes.

The American Legislative Exchange Council (ALEC) found in a nationwide study that eighteen states implemented “pro-growth tax changes” in the 2013 legislative year, making their states more attractive to investors and entrepreneurs.

“It is very clear that the states that are keeping competitiveness in mind are the states that are growing today, while the states that raise taxes and spend more are the states that are struggling along the way with high unemployment rates and spending that is bankrupting their cities,” Jonathan Williams, the director of tax and fiscal policy at ALEC, told The Daily Caller News Foundation.

The study also shows that “not all taxes are created equally,” he said.

“Taxes on capital such as income taxes, taxes on investments, death taxes and the like are the most damaging form of taxes for economic growth,” Williams explained. “The number one category of taxes that were cut this year across the states were income taxes because legislatures realize that this is a big factor.”

Texas was one of the eighteen states that ALEC believes passed sound economic tax policies in 2013.

Texas’s low corporate and income taxes have consistently made it one of the best states for business for almost a decade.

In 2013, 700 CEOs from across the country ranked Texas the most “business friendly” state for the ninth consecutive year. The state’s booming population growth earned it four new congressional districts over the past ten years.

A number of other states are learning a lesson or two from the Texas model.

Idaho’s new tax cut, which exempts small businesses from the personal property tax up to the first $100,000, should help strengthen the state’s business climate.

Among many other tax reforms, North Carolina eliminated the state’s death tax and reduced its income tax across all socioeconomic brackets.

Ohio enacted a 10 percent across-the-board income tax rate cut that will phase in over the next three years.

However, other states with burdensome tax codes are not faring so well.

“California has become the poster child for big spending, big taxes, and big pension obligations that are putting a lot of cities into bankruptcy,” said Williams.

Willliam concluded, “Even with all of the advantages California offers such as nice weather and Hollywood, why has the state lost 1.5 million Americans over the past 10 years to the other 49 states?”

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Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.