This is the Cato Daily podcast for Wednesday, January 15th, 2025. I'm Caleb Brown. State lawmakers are back at work. Where should they be directing their efforts? And where are they directing their efforts? Steve Slavinsky is a senior fellow at the Cato Institute. We discussed where states should focus efforts to enhance liberty and otherwise get out of the way of civil society.

States are getting back to work, state legislatures rather are getting back to work. States are always working. And to the extent that state legislatures are getting back to work, where have some of the leaders

been focusing their efforts in terms of policy reform? And what are they reacting to?

For a long time, most of the state competition, at least among what we may call red states,

but on policy has been in the realm of tax policy. I think that's been for the good.

One thing that we see, for instance, is more than half of all states now have either a flat tax or no

income tax. So this form of state competition, which we've seen since the 80s during what was

called the supply side revolution, that kind of tax competition has kind of gotten its own momentum.

So we see a lot of people, or rather a lot of legislators, interested in tax reform, and that's a very

good thing. But I think a lot of legislators are right to move their attention now to another

form of barrier to the supply side or the creation of new value, the creation of new businesses,

creation of new housing, things like that, those barriers are regulatory in nature. And so I think we're starting

to see a momentum behind what might be called a new supply side agenda for the states. Again,

not ignoring the fact that tax policy is very important, but the regulatory policy is becoming a lot

more salient nowadays. I would imagine even in states where lowering taxes is just not on the table,

there are a lot of reforms that states can and have engaged in that frankly don't cost anything in terms of either revenues or a tax hike

or creating some sort of new spending program, where are the, where's the low hanging fruit?

What are the most productive ways that states can without a budgetary line item really do something for

their constituents? Absolutely. So I think one of the easiest ones they can do is occupational

licensing reforms that allow people from other states to come in and have a reciprocity with a license they might have from a prior state to do something like, oh, I don't know, be an accountant or sell real estate or cut hair or things like that.

Right. So there's actually a movement of over 25 states currently have what are considered universal licensing reciprocity allowances. Effectively,

the law says, we're going to treat an occupational license just like a driver's license.

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