The biennial revenue estimate released Monday by State Comptroller Susan Combs should provide the impetus for significant tax reduction during the legislative session.Combs certified that there would be $101 billion available for appropriations. At least one-half of the estimated surplus should be set aside for fiscally conservative initiatives, most notably the gradual phase-out of the state business tax over seven to 10 years.State Sen. Craig Estes, R-Wichita Falls, has filed SB 113 to accomplish that.Over the past decade or more, Texas has set an example of good governance. Working with Gov. Rick Perry, the Legislature has enacted a succession of balanced budgets without a tax increase. The state has maintained a favorable regulatory climate, substantially reformed the civil justice system and encouraged targeted business investment through the Enterprise Fund.Texas is home to the second-highest number of Fortune 500 companies in the nation (52), one behind California and three ahead of New York. Texas has recovered strongly from the economic downturn, regaining all the payroll job losses since 2008.However, with these successes come new challenges, and there are at least three reasons to phase out the state business tax.Other states are beginning to emulate Texas' fiscal and economic management. Wisconsin has enacted sweeping public-sector reforms; Ohio, Kansas and Indiana have cut income and/or business taxes; and New Jersey has slashed its budget and cut property taxes. Most recently, Michigan adopted a right-to-work law. These changes will create more economic competitiveness among the states.The national context, too, should provide impetus for tax reform in Texas. Taxes are going up because of federal policy. As a result of the "fiscal cliff" deal, every employee will pay higher payroll taxes, in addition to the higher marginal tax rates that will hit small-business owners and upper-income earners. Also, 17 new taxes and fees will take effect as a consequence of the Affordable Care Act. Buffering Texas taxpayers from the slew of new federal taxes is cause enough to eliminate a major state tax.Last, Texas' continued economic power is not a certainty. Continued strong fiscal policy matters. As economist Brian Domitrovic at Sam Houston State University recently argued, "Given the great rise in state tax receipts in recent years, Texas stands in jeopardy of repeating California's grave mistake. If Texas does not cut taxes soon, it will guarantee an increased level of governmental displacement of the real economy and choke off the sources of what's emerging as one of the proudest moments in all of Lone Star history: the state's great prospering in the context of national economic stagnation."In the current economic climate, being relatively better than Washington, D.C., or failed states like California is a low bar. Texas must resolve to remain absolutely better than all other states and the nation as a whole.Repealing the franchise tax would be of tremendous benefit to all sectors of Texas' economy. In a study for the Texas Conservative Coalition Research Institute, the Beacon Hill Institute at Suffolk University underscored the impetus for legislative action: "The governor and new legislature should take tax reform seriously in the upcoming term to further boost the competitive Texas economy."The time has come for Texas to be bold and visionary. Being the only major state without a business tax would guarantee that the state will remain a magnet for job creation and business investment.John Colyandro is executive director and Tom Aldred is director of policy & research at the Texas Conservative Coalition Research Institute, based in Austin.