For months, North Carolina politicians, lobbyists, policy analysts, and journalists have been buzzing about the possibility that fundamental tax reform might top the state agenda in the coming year. Now that the 2013 legislative session has begun in earnest, here is a status report on the tax reform debate.

As expected, tax reform is indeed a top priority for the Republican-led legislature and the new administration. Gov. Pat McCrory, House Speaker Thom Tillis, and Senate leader Phil Berger have all committed to the goal of adopting a pro-growth tax code that derives most of the state’s General Fund revenue from a tax system with lower marginal rates and a greater emphasis on taxing consumption rather than taxing total income.

However, just because these three politicians, as well as other legislators and policymakers in Raleigh, agree on the goal of fundamental tax reform doesn’t mean that they agree entirely on the means and pace of such reform. In fact, there are several different paths to the same goal, each with their own pluses and minuses.

The John Locke Foundation, the Civitas Institute, and the Tax Foundation are public policy think tanks that have weighed in with their own models for tax reform. JLF and Civitas are based in North Carolina. The Tax Foundation is Washington-based but recently produced a tax-reform study for the Carolina Business Coalition. While these think tanks have much in common, both in general philosophy and in the principles of sound tax policy, they are separate organizations acting independently of each other. Their tax-reform plans differ in a number of respects.

State Sen. Bob Rucho of Mecklenburg County has received the most attention for his approach to fundamental tax reform – which would replace most of the state’s General Fund taxes with an expanded sales tax, a new business net-worth tax, and a higher state tax on real estate transactions. Strictly speaking, however, Sen. Rucho does not yet have a “plan.” There is no bill filed, and no fiscal note attached to it.

So far, then, the only tax-reform plans on the table have come from the three think tanks I mentioned: Civitas, JLF, and the Tax Foundation. Civitas has proposed one plan which appears to reflect Sen. Rucho’s concept in virtually all respects. JLF has proposed two plans based around the concept of a consumed-income tax using Unlimited Savings Accounts (USAs). One of the JLF plans would replace the current personal income tax, corporate income tax, state sales tax, and estate tax with a unified USA Tax at a rate of 8.5 percent. The second JLF plan would keep the state sales tax in place, with a somewhat-lower rate, and adopt a 6 percent USA Tax to replace the other taxes.

The Tax Foundation’s new report outlines four different tax-reform plans. Their Plan A would levy a 6 percent state tax on personal income, a 3.5 percent state sales tax broadened to cover services sold at retail, and no corporate or franchise tax. This is similar one of the John Locke Foundation’s plans – a 6 percent USA Tax and 4.5 percent state sales tax – except that the Tax Foundation’s proposed income tax applies to total personal income rather than consumed income alone.

The Tax Foundation’s Plan B would keep all of North Carolina’s major state taxes in place but reduce their rates through base-broadening.

The Tax Foundation’s Plan C tracks closer to the Civitas model of abolishing personal and corporate income tax, but eschews Civitas’s proposed $4 billion net-worth tax on businesses. So Plan C has a combined state/local sales-tax rate of 10.85 percent.

The Tax Foundation’s Plan D tracks closer to the JLF plan that replaces most major state taxes with a flat USA Tax of 8.5 percent. But Plan D eliminates one more tax than JLF does, the franchise tax, while means that the resulting income-tax rate of 10 percent is a bit higher than JLF’s proposal. Plan D also lacks JLF’s tax-free USA accounts and thus preserves the current tax bias against savings and investment.

I know this all looks and sounds complicated. But whenever you move from general principle to policy details, you inherently gain complexity. In fact, no serious proposal to reform the state tax code can fit on a bumper sticker. Your goal certainly can – “tax spending not saving” or “adopt pro-growth taxes” would suffice – but the mechanics, economics, and fiscal implications of tax reform require significant detail and explanation.

To sum up, then, there are at least three potential conservative paths to reform as I see it:

• Abolish income taxes in North Carolina and pay for most state services with a broad-based tax on retail sales. The resulting state sales tax rate will be about 9 percent and the combined state/local rate will be approximately 11 percent.

• Abolish the state share of the retail sales tax and pay for most state services with a consumed-income USA Tax. The resulting USA Tax rate would be in the 8.5 percent to 9 percent range, if you leave the franchise tax alone, or 10 percent if you abolish both the corporate and franchise tax. There would still be a local sales tax of 2 percent in most jurisdictions, 2.25 percent in a few counties, and 2.5 percent in Mecklenburg.

• Keep both systems for collecting tax from North Carolina households (direct payment through income tax and indirect, business-collected payment through sales tax) but adjust the tax base and marginal rates to make the overall system less hostile to investment, business formation, and economic growth. This would likely result in a flat income tax rate of about 6 percent, preferably with USA accounts to make it a consumption tax, and a state/local sales tax of between 5.5 percent and 6.5 percent, depending on whether you broaden the sales-tax base to include services.

I like the second and third options better than the first option. What do you think?

Hood is president of the John Locke Foundation.