Tax trading on the rise.

• Position: TRENDS AND TRANSITIONS

Would you like to swap that grocery tax for a cigarette tax? How about trading property tax cuts for a sales tax increase? It might just happen as lawmakers across the country consider changing the mix of taxes that flow into state coffers.

Tennessee is looking at raising cigarette taxes to pay for grocery tax cuts. Another option (which the Knoxville News" Sentinel called the "tax porn, not corn" swap) would increase adult entertainment taxes to cut the food sales tax rate by half. It is actually called the Food Tax-Adult Materials Tax Swap Act of 2007, and is sponsored by Representative Stacey Campfield and Senator DeWayne Bunch.

In the property tax area, Idaho, New Jersey and South Carolina all have cut property taxes and increased sales taxes to replace the lost revenue.

Business tax swap ideas are percolating in states like Illinois, where the governor wants to create a business gross receipts tax to fund property tax cuts, while House members would rather trade income and sales tax increases for property tax cuts and more education funding. Michigan is looking to trade its single business tax for something else because the tax expires this year. The governor...