How State Tax Commissions Approach Economic Development

Nearly all state tax commissions—independent groups that study and make recommendations for improving a state’s tax system—are tasked with improving economic development within the state. Their report introductions include phrases such as “growth-friendly,” “unleash innovation,” and “optimum competitor.” And many commissions cite economic development to justify their concluding recommendations. But most reports ultimately contain little exploration or explanation on how taxes and economic development are (or are not) linked. This is a missed opportunity because most commissions thoroughly investigate their state’s tax structure, often with the assistance of respected tax and budget experts. This brief was updated in November 2016 to include state tax commissions in Delaware, Florida, and Rhode Island. Numbers and text throughout were updated to reflect their inclusion.