3/15/2006

Most Business Friendly States

I read an interesting article talking about which states have the most business friendly tax systems, and how businesses are attracted to these states. It is interesting; Utah is ranked number 18 on the list. The article stated, “Every tax law will in some way change a state’s competitive position relative to its immediate neighbors, its geographic region, and even globally. Ultimately it will affect the state’s national standing as a place to live and to do business.” I believe this is what a lot of business look for when they settle down in a state. How profitable can they be if they locate themselves in Nevada (ranked number 5) verses California (ranked number 40)? What’s your take?

5 comments:

noah said...

I'm sure that many businesses do consider a state's tax system when they are thinking about a relocation to another state, but I think there are other factors that are more important. The top three states in the list are Wyoming, South Dakota and Alaska. Maybe they have a business friendly tax system in an attempt to make up for low skilled workers and/or poor geographic locations. The tax systems in these states may be attractive, but I don't hear of many businesses wanting to relocate to these states.

Frank said...

The incentives for new business establishments, I'm sure have a great weight on taxes, but deal more with the needs of the firm like the need for educated labor of service. The size of the customer base and/or transportation needs may have a larger priority.

Boris said...

This issue plays a huge part in business decisions! If I get one more letter from some credit card company in Delaware(8), I'm going to throw up! Seriously, take a look at how many companies are incorporated in Delaware! It's got great tax benefits and it's got a great location.

Blake said...

I'm not a huge fan of giving large companies major tax breaks. I have listened to the mayor, and economic development director of Cedar City speak, and the incentives Cedar City has offered businesses, has ultimately ended up hurting the workers. Low wages, crappy employee benefits, and great tax benefits for company owners? Sounds like a terrible system to me!

Dr. Tufte said...

We may knock S. Dakota, Wyoming and Alaska, but those states are doing pretty well.

As for Utah, most residents of this state have an inflated version of how conservative it is. It may be so socially, but it is not economically or politically. We are just about middle of the road on many issues, and this one shows it.

Boris: Delaware is the way it is, not because of taxes, but because of easy laws for incorporation.