The Tax Foundation just released their 2012 version of the State Business Tax Climate Index for the United States.
The Tax Foundation’s report was built from five components:
- Corporate Tax
- Individual Income Tax
- Sales Tax
- Property Tax
- Unemployment Insurance Tax
The Foundation designed these five components to score each state’s business tax climate on a scale of zero (worst) to 10 (best).
The 10 best states in this year’s Index are:
2. South Dakota
6. New Hampshire
It is obvious that the absence of a major tax is a dominant factor in vaulting many of these 10 states to the top of the rankings. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax.
Wyoming, Nevada and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.
The lesson is simple: a state that raises sufficient revenue without one of the major taxes will, all things being equal, have an advantage over those states that levy every tax in the state tax collector’s arsenal.
California is #1 (or rather #50)
New Jersey took the grand prize as the worst in the nation for tax and business climate. But as a resident of the People's Republic of California I am proud that the Golden State ranked as the worst in the nation in the individual income tax category. (Click on link below)
Now to rank #48 out of 50 in business climate and taxes is something to be proud of. But to be #50 in grinding people into poverty through the Marxist income tax is really special. The Comrades in our state legislature should all be given special Karl Marx ribbons.
The 10 lowest ranked, or worst, states in this year’s Index are:
44. North Carolina
46. Rhode Island
49. New York
50. New Jersey
New Jersey scores at the bottom by having the third-worst individual income tax, the fifth-worst sales tax, the 13th-worst corporate tax, and the second-worst property tax. Rhode Island has improved from 47th to 46th by implementing a modest individual income tax reform, but still has the worst unemployment tax system and fifth-worst property tax system.
Maryland improved from 44th to 42nd this year due mostly to the expiration of the state’s “millionaire’s tax” on high-income earners. The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.
Click on The Tax Foundation for details about your state.