This is the Cato Daily Podcast for Wednesday, September 12, 2012. I'm Caleb Brown.

As we await the release of the next edition of the Cato Institute's

Governor's Report Card.

A few trends in state tax policy have emerged in the past two years.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute and author of the report describes the trends.

We take a look at 48 governors this year in the governor's report card, which is the 11th

biannual governor's Report Card, Steve Moore, now the Wall Street Journal,

started the Governor's Report Card back in 1992.

This year I look at trends in state tax and spending policy since the year 2010 and what I've noticed

the last few years are a big movement towards reforming business taxation.

The economy of course has been very poor the last few years and so a lot of governors

and both parties are looking at changing the tax code in order to encourage businesses and

investment. Which states have done the best at this and how are they going

about it? Well there's two big trends in tax policy I've noticed the last few

years. One is a good trend and that is cuts to damaging business taxes

including the corporate income tax.

And a bad or negative trend

is an increase in the use of so-called tax incentives

or narrow tax breaks.

The good trend I've noticed is that there's been a big effort to look

at state taxes that harm businesses and investment and try to reform them. People may think that federal taxes on business are much more

significant than state taxes on business, but in fact it's the reverse.

...