NSW not keen on PM's tax proposal

NSW Premier Mike Baird has reacted cautiously to the prime minister's plan to allow states to levy income tax.

"While I have historically argued for a share of income tax for the states, this has not involved increasing the income tax burden on Australian households, which already have among the highest income tax rates in the world," Mr Baird said.

"These matters can be considered in the longer term. What is required right now is a partnership between the Commonwealth and the states for the health and education services we need," he said in a statement on Wednesday.

Prime Minister Malcolm Turnbull's plan would have the federal government reduce its income tax by an agreed percentage and allow state governments to levy income tax to an equal amount.

Mr Baird said he had not seen a formal proposal but would be happy to consider the idea constructively.

"It is my firm belief we can only solve these problems together," he said.

State premiers and territory chief ministers are expected to be briefed on the plan when they meet in Canberra this week.