Two states have rejected Prime Minister Malcolm Turnbull's radical push for states to set income taxes, while other premiers and chief ministers have delivered a mixed response.

Key points: South Australia and Tasmania say the plan for states to set income taxes is impractical

South Australia and Tasmania say the plan for states to set income taxes is impractical SA's Jay Weatherill says it would be confusing and difficult to administer

SA's Jay Weatherill says it would be confusing and difficult to administer Will Hodgman says Tasmania could be disadvantaged against other states

Will Hodgman says Tasmania could be disadvantaged against other states WA's Colin Barnett has given the warmest response to the plan

The plan, detailed on Wednesday, would see federal income tax lowered, allowing the states and territories to levy their own additional percentage.

The new funding stream would help states fund schools and hospitals.

But South Australia and Tasmania say the idea will not work.

"That's something that wouldn't be practical," South Australian Labor Premier Jay Weatherill told the ABC.

"I couldn't imagine a state would be interested in doing that, it'd create a lot of confusion across the federation, it'd be very impractical to administer."

Tasmanian Liberal Premier Will Hodgman said the proposal would be unworkable, and that it could see Tasmania lose out to larger states.

"We have been through the argument before with the GST," Mr Hodgman said.

"We are a state that is small and with a demographic profile that would disadvantage us against other states."

But ACT Labor Chief Minister Andrew Barr said the proposal was worth considering.

"This proposal the Prime Minister has put for has the potential to address that [financial] imbalance between the two levels of government, so it's worthy of consideration on that basis," he said.

"But, as with all of these things, there's a lot of complex interactions between the two levels of government so we'll need to analyse the fine detail of the proposal."

Victorian Premier savages 'kite flying, thought bubble stuff'

Victorian Labor Premier Daniel Andrews lashed the plan, saying it does not address multi-billion-dollar health and education funding cuts.

"Calling this a thought bubble would be kind," Mr Andrews said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 6 minutes 39 seconds 6 m Victorian Premier savages PM's 'undercooked' tax plan

"In a conversation with the Prime Minister he indicated to me this would be revenue neutral. Well, if it's revenue neutral, how's it dealing with funding gaps in hospitals and schools?

"People are entitled to a Government that's prepared to put plans out there for change, not this shadow boxing, kite flying, thought bubble stuff."

West Australian Liberal Premier Colin Barnett has given the warmest response so far.

"[For] the states to have some capacity to collect part of income tax, and in the future some ability to vary that, does give the states greater financial strength and greater financial autonomy," Mr Barnett said.

"So I think what he's proposing is quite a simple reform."

New South Wales Liberal Premier Mike Baird said his state would consider any formal proposal to shake up the federation, but it should not be the focus of this week's COAG meeting.

"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," 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."