Washington Examiner: South Dakota, Texas top states for entrepreneurs

Submitted by Chamber on Wed, 07/28/2010 - 13:45

By: Mark Tapscott
Editorial Page Editor

Thinking about starting a business but not sure where to locate it? The Small Business and Entrepreneurship Council (SBE) has just the thing for you - an index of how friendly each of the 50 states are in their tax codes to such endeavors.

South Dakota, Texas, and Nevada are the top three states with the most small-business and entrepreneur friendly tax systems, according to the latest edition of the index. To grasp just how difficult a task is facing Gov. Chris Christie's New Jersey is the worst state in the Index.

The index measures 16 different factors in rating an individual state, then assigns it an index number based on its composite performance on those factors. With the economy in the Great Recession, state tax policies are even more important to small businesses and entrepreneurs, according to Raymond J. Keating, SBE's chief economist and author of the index.

"Taxes at the state and local levels matter by diverting resources from and reducing incentives for productive, private-sector risk taking that generates innovation, growth and jobs. Quite simply, economic recovery will be restrained by high and/or increasing taxes, or boosted by low and/or falling taxes. Governors and legislators have a choice," he said.

The rest of top 10 states in the index include, in rank order from fourth to 10th: Wyoming, Washington, Florida, Alabama, Alaska, Ohio, and Colorado.
The rest of the bottom 10 states after New Jersey include, starting with 49th Minnesota, followed by California, New York, Maine, Iowa, Vermont, Oregon, Massachusetts, Rhode Island, and Hawaii.

New Jersey's only consolidation is that the District of Columbia would rank 51st if it were a state.