Something Is Rotten In New Jersey
This report from the Small Business and Entrepreneurship Council ranks the 50 states and D.C. according to 38 major government-imposed or government-related costs affecting investment, entrepreneurship, and business. Some people might have a MEGO, (My Eyes Glazed Over) episode reading this 50 page report, and so I decided to crunch out a piece that shows a table for tax policy and a table for spending policy. In each of these two tables I include the four most entrepreneur-friendly states and the four most anti-entrepreneur policy environment states according to this report. The worst state is New Jersey preceded by New York, California, and Vermont. The best state is South Dakota followed by Nevada, Texas, and Wyoming.
The tax policy table includes data for the following: Personal Income Tax, Individual Capital Gains Tax, Corporate Income Tax, Corporate Capital Gains Tax, and Death Taxes. The spending policy table includes data for the following: Electricity Costs, State Tort Liability Costs, Highway Cost Efficiency, and Protecting Private Property. These 9 out of the 38 categories do show the most stark contrast between the top and bottom states in terms of who has created the better environment for entrepreneurship. The top states do not have the ocean beaches and scenic harbors like three of the bottom four states, but they understand better than other states what needs to be in place for a better environment for entrepreneurship. Every business uses electricity, and for some, electricity costs rank among the highest expenses. High electricity rates due to hefty taxes and heavy-handed, misguided regulations can play a significant part in business decision-making. The condition and performance of roads and highways are of significant importance to most businesses. High state death taxes offer incentives to move investment and business ventures to less taxing climates; foster wasteful expenditures on tax avoidance, estate planning and insurance; and force many businesses to be sold, borrowed against or closed down. In these tables below the lower the number, the lighter the governmental burdens, and the better the environment for entrepreneurship. The greater the incentives to invest and take risks in that particular state.
|State||Top PIT Rate||Top Ind CG Rate||Top CIT Rate||Corp CG Rate||DeathTaxes|
|State||Elec Util Costs||State Liability||Hgwy Cost Eff||Eminent Domain Leg|
Politicians like to serve up nice talk about small business, but all too frequently, public policy raises costs, creates uncertainty, and diminishes incentives for starting up and investing in businesses. The US Government should learn from the successful and the failing states the policies that are working, and the policies that never work. The citizens are learning and moving their family and business to states with low taxes, low electric bills, low threat of frivolous lawsuits, well maintained roads, and excellent private property protection. The politicians in DC need to catch up with the citizenry.
Cross-posted at The Minority Report