Business Tax Climate Rankings by State

The Tax Foundation has produced the 2013 report on the tax climate rankings of the states as of July 2012.  The ten states with the most favorable business tax climate and the ten with the worst are color-coded in the map below with their rankings given.  The white states are the best.

2013 State Business Tax Climate Index Ranks and Component Tax Ranks
State	Overall Rank	Corporate Tax Rank	Individual Income Tax Rank	Sales Tax Rank	Unemployment Insurance Tax Rank	Property Tax Rank
Alabama	21	17	18	37	13	8
Alaska	4	27	1	5	28	13
Arizona	25	24	17	50	1	5
Arkansas	33	37	28	41	19	19
California	48	45	49	40	16	17
Colorado	18	20	16	44	39	9
Connecticut	40	35	31	30	31	50
Delaware	14	50	29	2	3	14
Florida	5	13	1	18	10	25
Georgia	34	9	40	13	25	30
Hawaii	37	4	41	31	30	15
Idaho	20	19	23	23	47	2
Illinois	29	47	13	34	43	44
Indiana	11	28	10	11	11	11
Iowa	42	49	33	24	34	37
Kansas	26	36	21	32	9	28
Kentucky	24	26	26	9	48	18
Louisiana	32	18	25	49	4	23
Maine	30	41	27	10	32	39
Maryland	41	15	45	8	46	40
Massachusetts	22	33	15	17	49	47
Michigan	12	7	11	7	44	31
Minnesota	45	44	44	35	40	26
Mississippi	17	11	19	28	7	29
Missouri	16	8	24	27	6	6
Montana	8	16	20	3	21	7
Nebraska	31	34	30	26	8	38
Nevada	3	1	1	42	41	16
New Hampshire	7	48	9	1	42	43
New Jersey	49	40	48	46	24	49
New Mexico	38	39	34	45	15	1
New York	50	23	50	38	45	45
North Carolina	44	29	43	47	5	36
North Dakota	28	21	35	16	17	4
Ohio	39	22	42	29	12	34
Oklahoma	35	12	36	39	2	12
Oregon	13	31	32	4	37	10
Pennsylvania	19	46	12	20	36	42
Rhode Island	46	42	37	25	50	46
South Carolina	36	10	39	21	33	21
South Dakota	2	1	1	33	35	20
Tennessee	15	14	8	43	26	41
Texas	9	38	7	36	14	32
Utah	10	5	14	22	20	3
Vermont	47	43	47	14	22	48
Virginia	27	6	38	6	38	27
Washington	6	30	1	48	18	22
West Virginia	23	25	22	19	27	24
Wisconsin	43	32	46	15	23	33
Wyoming	1	1	1	12	29	35
Dist. of Columbia	44	35	36	42	48	24
Note: A rank of 1 is more favorable for business than a rank of 50. Rankings do not average to total. States without a tax rank equally as 1. D.C. score and rank do not affect other states. Report shows tax systems as of July 1, 2012 (the beginning of Fiscal Year 2013).

The scores of the ten best business tax climate states are:

1)  Wyoming, 7.66
2)  South Dakota, 7.56
3)  Nevada, 7.45
4)  Alaska, 7.34
5)  Florida, 6.88
6)  Washington, 6.38
7)  New Hampshire, 6.25
8)  Montana, 6.22
9)  Texas, 6.09
10) Utah, 6.04

There is not much difference between the top four ranked states.  There also is not much difference in those ranked from 6 through 10.

The ignominious final ten states are:

50) New York, 3.40
49) New Jersey, 3.40
48) California, 3.67
47) Vermont, 4.08
46) Rhode Island, 4.12
45) Minnesota, 4.18
44) North Carolina, 4.21
43) Wisconsin, 4.37
42) Iowa, 4.47
41) Maryland, 4.47
40) Connecticut, 4.47

The three worst states, New York, New Jersey, and California really stand out from the rest with their very low scores.  The remainder of the worst ten states all have close scores between 4.08 and 4.47.

The middle states of Arizona with a score of 5.13 and Kansas with a score of 5.10 lag the lowest state of the top ten more than they exceed the best state of the bottom ten states.  There are more states with high tax policies than there are with low tax policies.  Indeed, the states ranked 20 (Idaho) through 30 (Maine) are only separated by scores differing by 0.27.  All of these states are closer to New York in score than they are to Wyoming.  The average of the Wyoming and New York scores is 5.53 and the state having the score closest to this is Missouri with a score of 5.46 and a rank of 16.  So, the top few states in the rankings are very much better than the average state.  Even in the top ten the differential score between #1 and #10 is much greater than that between #50 and #40.

I live in the beautiful state of Maryland with a really awful state government.  Its business tax climate rank of 41 makes it a terror for businesses.  Much of my family is in Oklahoma with a poor ranking of 35.  One sister owns a business in North Carolina, which actually worse than Maryland!  Another sister tries to do business in Kansas with a ranking of 26, which as I mentioned puts it much closer to New York than to Wyoming.

I hear that parts of Wyoming are beautiful.  I will have to do some business scouting there and see if there is a suitable way to do business as a materials laboratory there.  After all, almost all of our customers send us materials to analyze by Fed Ex and UPS anyway.  My laboratory could be anywhere.

The Missing Jobs in June 2012 are Unchanged from June 2010

This is the monthly update on the real unemployment situation in the USA based on the Bureau of Labor Statistics June 2012 Household Survey Jobs Data.  The data I will use will not be seasonally adjusted, so we will need to compare June of this year with the unemployment of June 2010 and June 2011 to see if any jobs recovery has occurred.  We will also calculate the number of missing jobs based upon the percentage of the jobs wanted in January 2000 relative to the working age civilian population available for work.  This excludes people in jail or in institutions for those in ill health.

The recent history of missing jobs is given in the following chart:

The number of missing jobs in June 2012 is slightly lower than the number of missing jobs in June 2011, but it is slightly higher than the number of missing jobs in June 2010.  Just as with every other month so far this year, if we compare the number of missing jobs to the same month a year and two years earlier, we find that essentially nothing has changed.

In contrast, the usual unemployment rate of June 2010 was 9.62%.  It fell to 9.32% by June 2011 and still further to the June 2012 rate of 8.43%.  But, this number means little due to the ever-increasing number of discouraged job seekers.  The number of the reported unemployed fell from June 2010 to June 2011 and again to June 2012.  The number of people employed also grew from June to June to June in that time.  However, the population of working age civilians also grew, so that the 12.80% of missing jobs in June 2010 had actually increased by June 2011 to 13.30%, before falling in June 2012 to almost the same percentage as in June 2010 at 12.74%.  A 0.06% decrease in the number of missing jobs in the last two years is no job recovery at all.  This has been the story consistently for the last two and half years.

The policies of the Obama administration are so wrongheaded that they have done great damage to the private sector economy and kept companies from hiring.  Government can do little to effectively increase hiring, but it is excellently capable of destroying jobs and keeping new jobs from being created.  Obama and his Democratic Socialist Party leadership have been working overtime finding ways to make the future ever more uncertain for business and in making labor so expensive that business cannot afford to hire.

John C. Goodman, CEO of the National Center for Policy Analysis, recently testified in the House of Representatives that ObamaUncaringTax will increase the cost of an employee by $6/hour.  The EPA is causing sizable increases in our electricity costs and a decrease in electricity reliability, which will cause great harm to many businesses and will reduce the money individuals can spend on other goods and services.  Many state governments are contributing to this problem with their mandates that green energy replace fossil fuels in the electricity supply of their state.  Despite a huge supply of oil and gas in the United States, the Obama administration has done everything it can to prevent the development of new fields on federal land and offshore.  The Dodd-Frank law has created great uncertainty and it has kept financial institutions from loaning to small businesses.  Obama and his union henchmen have interfered with employer-employee relations to the detriment of business.  The looming taxes of the ObamaUncaringTax will take a huge toll, which include a tax surcharge on individuals with higher incomes and on corporations, in addition to the penalty taxes.  This punitive taxation of higher income individuals is not enough for Obama and he wants to eliminate their low percentage decrease part of the Bush tax cuts.  All this is happening in the face of the start of the Baby Boomer retirements and the continued collapse of the housing market.

Of course business is not hiring enough people to get Americans back to work with a jobs recovery to this never-ending recession.  With Obama destroying the business climate, nothing will change and nothing will change Obama.  He is a dyed-in-the-wool socialist.  He is fundamentally anti-business, with the exception of those who generously support his campaign fund.  Even then many of those companies have found him unbelievably treacherous.  The only hope for our economy and for Americans who want to be able to earn a living is the replacement of Obama with Romney.

The 2011 State Business Tax Climate Index from the Tax Foundation

Kail M. Padgitt, of the Tax Foundation produced the 2011 State Business Tax Climate Index in October.  The report evaluates the effects of state taxes of the following types with the relative weighting following as a percentage:

• Individual Income Tax, 29.64%
• Sales Tax, 25.16%
• Corporate Tax, 19.35%
• Property Tax, 14.57%
• Unemployment Tax, 11.28%

The results of the evaluation are shown in the map below by rank:

In the scoring, the average was set at 5.00 on a scale of 10.00.  I have made up two tables giving the score of each state assigned by the Tax Foundation Study and its rank for 2011 and the rank for 2010.  To this I have added my calculated growth in the state's Gross State Product from 2005 to 2008.  I have also indicated the party in control of the governor's office, the State House, and the State Senate in 2010.

The highest ranked three states, South Dakota, Alaska, and Wyoming, stand out from the other states with their high scores.  The second set of three states, Nevada, Florida, and Montana, also enjoys some significant separation from the other states.  Then New Hampshire and Delaware stand out a bit also.  Beyond that, very small differences in state scores can mean changes of several rank positions, until you get to the bottom 7 positions beginning with Maryland.

Do high taxes discourage the growth of the state Gross State Product (GSP)?  The top 10 ranked states grew by an average of 17.59% from 2005 to 2008, while the bottom ten states grew by 13.36%.  Low taxes provided a 4.23% growth rate advantage to the low tax states in that three year period.  Let us do the math to find the effect this difference in growth would have over 5 three year periods:  1.1759 to the fifth power is 2.248, while 1.1336 to the fifth power is 1.8720.  The difference is that the low tax state economies become 2.25 times larger, while the high tax economies become 1.87 times larger.  Such growth differences matter to the quality of the People's lives.

Let us examine if there is any difference in tax ranking that correlates with the party holding power in the states.  Of course, the 2010 powers that be were not likely to have instantly changed many state taxation traditions, so the duration of control by a given party is also important.  But to keep things simple, we will just consider the party in power in 2010.  Besides, according to Judge Napolitano on Fox Business on Sunday, there is only one party, the Big Government Party, so we should find equality in this tabulation if he is right.  For the top 10 states in the business tax ranking, counting 1 for each case of control of a governorship, house, or senate, the Republicans score 17 and the Democrats score 11.   For the bottom 10 states, those with the worst business taxes, the score is Republicans 6, Democrats 24.  Sorry Judge Napolitano, but on the matter of the business tax climate, it appears that it matters quite a bit which party controls a state.

Of course, there are exceptions.  For instance, Arizona was controlled in all three state government components by Republicans and yet it was in the 34th position and had actually fallen from the 28th position in 2010.  Bad Republicans in Arizona!  I will also chide Oklahoma, where much of my family lives and where I graduated from high school.  Oklahoma has generally been a Republican state for a couple of decades now, but it ranked only 30th among the states.  With Texas (13), Colorado (15), and Missouri (16) on its borders, it is surely losing many businesses to those nearby states with much higher rankings.  In rankings that consider the regulatory environment as well, Oklahoma does better in the ranking, but still there is a clear need for improvement here.

Speaking of the border effect, the state of Maryland is pursuing an insane high tax strategy as well.  It is ranked 44, but Delaware (8), Virginia (12), and Pennsylvania (26), and even West Virginia (37) are all on its borders and offer better business tax climates.  This is why Northrop Grumman, with large operations in Maryland, just moved its headquarters to Virginia which just improved its ranking by three positions.  Virginia was chosen as the #2 best state for business by CNBC, who picked Texas #1.  Virginia's governor says Virginia is coming after Texas and will take over the #1 spot.  Maryland is not in the race and couldn't give a fig.  Maryland's expertise is in suckling at the teats of the federal pig and living off the taxpayers from across the entire country.

Looking at the map above, it is very noticeable that New Hampshire, Delaware, Virginia, Florida, Texas, and Indiana are each states that have much better business tax climates than any of the states on their borders.  They are each sucking in businesses from the nearby states and helping their homegrown businesses to succeed in the most effective manner: by not putting burdens on them with high taxes.  States using limited time tax incentives or offering training to the employees of industries the state has picked as winners are not as effective in growing businesses and jobs as those who leave all this to the private sector.  Dell Computer had a four-year special tax break from the state of North Carolina for a facility, for instance, and has now announced that it is leaving the state when the four years are up.  This is not surprising.  North Carolina is ranked #41, so it makes sense for Dell to go back to Texas at a #13 ranking or maybe move that facility to Florida with its #5 ranking.

Changes of State Representatives and Electoral Votes in 2012

We are close enough to the 2010 Census time that pretty good predictions should be possible for the states which will gain seats in the House of Representatives and states which will lose seats there.  Since the number of Electoral College votes each state has is the sum of the number of Representatives and Senators they have, this also has possible important implications for the presidential race in 2012.

On 23 December 2009, the Census Bureau made its last U.S. population estimate by state as of 1 July 2009 prior to the census.  If these figures were translated into seats in the House of Representatives, the blog site 270toWin says the apportionment results would be:

Texas +3

Arizona +1

Florida +1, now RED

Georgia +1

Nevada +1, now RED

South Carolina +1

Utah +1

Washington +1

Illinois -1

Iowa -1

Louisiana -1

Massachusetts -1

Michigan -1

New Jersey -1

New York -1

Pennsylvania -1

Ohio -2

The states that voted for Obama in 2008 are in blue and those that voted for McCain are in red.  Meanwhile, the voters in Florida and Nevada have become very unhappy with Obama, so Florida and Nevada are now red.  So, of the now Red States, there is a net gain of projected 2012 Representatives and Electoral Votes of +8.  The loss among the Blue States is -8, for a net swing of 16 Electoral College votes and 16 Representatives to the Republicans.  Of course, this is just a zeroth order estimate with respect to the effect upon the House of Representative's party affiliations.  Redistricting and the quality of candidates will have a major impact on the number of Republican Representatives a state winds up with.  The impact on the re-election chances of Obama is more straightforward.

There is something else to observe here.  People go where they can find jobs.  The Red States are clearly creating many more jobs than are the Blue States.  There is a long-term downside to being the more highly socialist party.  The Party of Mass Destruction, the Socialist Democrat Party, is very effective in destroying the business climate and in destroying jobs.  When jobs are killed, as in Ohio, Michigan, Pennsylvania, New York, New Jersey, New York, Massachusetts, and Illinois, people have to move away to states with jobs.

This is just a snapshot of the jobs issue, but if one weights the state unemployment rate of November 2009 by the absolute number of Representatives projected as gains or losses, the average now Red State unemployment rate for those changing number of Representatives is 10.24%.  That for the now Blue States changing representation is 10.92%.  By November of 2009, the huge sums of money sent to Wall Street for the bailout had surely kept employment from falling as much in NY and NJ as it otherwise would have.  A huge amount of bailout money was transferred to the auto industry in MI as well.  Since the stimulus bill was mostly a long-time wish list of Democrat special interest funding, more of it went to Blue States than to Red States.  Nonetheless, the Red States still had a lower weighted November 2009 unemployment rate!

Some Examples of Serious AGW Problems Emphasized by the CRU E-mail Dump

The recent dump of e-mails, documents, and programs from the Climate Research Unit (CRU) of the University of East Anglia by a probable whistle-blower has made the manufactured consensus and the problems of the science by the catastrophic AGW alarmists all the more apparent.  Here are a few nuggets:

Much attention has been given to Michael Mann’s (Pennsylvania State University) and Keith Briffa's (CRU) proxy temperature data hockey stick data sets. Briffa was conflicted in this whole process, noting he “[tried] hard to balance the needs of the IPCC with science, which were not always the same.  He felt “there is pressure to present a nice tidy story as regards ‘apparent unprecedented warming in a thousand years or more in the proxy data.’”

Programmer Ian “Harry” Harris, in the Harry_Read_Me.txt file, commented about:

[The] hopeless state of their (CRU) data base. … No uniform data integrity, it’s just a catalogue of issues that continues to grow as they’re found. … I am very sorry to report that the rest of the databases seem to be in nearly as poor a state as Australia was. There are hundreds if not thousands of pairs of dummy stations, one with no WMO and one with, usually overlapping and with the same station name and very similar coordinates. I know it could be old and new stations, but why such large overlaps if that’s the case?Aarrggghhh! There truly is no end in sight. …
This whole project is SUCH A MESS. No wonder I needed therapy!!
I am seriously close to giving up, again. The history of this is so complex that I can’t get far enough into it before by head hurts and I have to stop. Each parameter has a tortuous history of manual and semi-automated interventions that I simply cannot just go back to early versions and run the updateprog. I could be throwing away all kinds of corrections – to lat/lons, to WMOs (yes!), and more. So what the hell can I do about all these duplicate stations?

Here is an e-mail from Tom Wigley, the former head of the CRU and now at the National Center for Atmospheric Research in Boulder, Colorado, to Phil Jones, the recent head of the CRU in which he expresses concern about Keith Briffa's work:

Date: Mon, 05 Oct 2009 03:57:57 -0600
From: Tom Wigley
To: Phil Jones Subject: Re: [geo] Re: CCNet: A Scientific Scandal Unfolds…
139.222.131.184
Phil,
It is distressing to read that American Stinker item. But Keith does seem to have got himself into a mess. As I pointed out in emails, Yamal is insignificant....
But, more generally, (even if it *is* irrelevant) how does Keith explain the McIntyre plot that compares Yamal-12 with Yamal-all? And how does he explain the apparent “selection” of the less well-replicated chronology rather that the later (better replicated) chronology?
Of course, I don’t know how often Yamal-12 has really been used in recent, post-1995, work. I suspect from what you say it is much less often that M&M [McIntyre and fellow sceptic Professor Ross McKitrick] say—but where did they get their information? I presume they went thru papers to see if Yamal was cited, a pretty foolproof method if you ask me.
Perhaps these things can be explained clearly and concisely—but I am not sure Keith is able to do this as he is too close to the issue and probably quite pissed of.
And the issue of with-holding data is still a hot potato, one that affects both you and Keith (and Mann). Yes, there are reasons—but many *good* scientists appear to be unsympathetic to these. The
trouble here is that with-holding data looks like hiding something, and hiding means (in some eyes) that it is bogus science that is being hidden.
I think Keith needs to be very, very careful in how he handles this. I’d be willing to check over anything he puts together.
Tom.


Wigley protested Michael Mann's sending a deceptive graph with a “fluke” result to back up Wigley’s contention that the recent cooling was still consistent with overall warming. He also claimed the IPCC and AGW scientists had made too many “dishonest presentations”.

On Oct 14, 2009, at 5:57 PM, Tom Wigley wrote:
Mike,
The Figure you sent is very deceptive. As an example, historical runs with PCM look as though they match observations—but the match is a fluke. PCM has no indirect aerosol forcing and a low climate sensitivity—compensating errors. In my (perhaps too harsh) view, there have been a number of dishonest presentations of model results by individual authors and by IPCC. This is why I still use results from MAGICC to compare with observed temperatures. At least here I can assess how sensitive matches are to sensitivity and forcing assumptions/uncertainties.
Tom.

Here is another matter discussed by Andrew Bolt:

The IPCC’s 2007 report made an allowance that drew heavily on a 1990 paper by Phil Jones that dismissed the UHI effect as largely trivial. That in turn drew heavily on a paper by Professor Wang Wei-Chyung of Albany, State University of New York, which presented data from China which both Wang and Jones claimed came from stations that had “few, if any, changes in instrumentation, location or observation times”, and so could be relied upon.

Mathematician Doug Keenan and others obtained the original Wang data and used it to track down the Chinese weather stations. They found that 49 of the 84 stations used actually had no records of station location, eight had inconsistent histories, 18 had been moved a considerable distance, and only seven were known not to have been relocated. One station had five different locations in 30 years as far as 41 km apart.

Wang seemed to have lied. His data was essentially worthless, and Jones’ (and the IPCC’s) claim that the Urban Heat Island effect was trivial now seemed unsupported by solid evidence.

These and many more documents have served to make it ever clearer that the catastrophic AGW hypothesis is mighty dubious.  The hockey stick data of Keith Briffa, the claim that the urban heat island effect is unimportant, and the reliability of the basic land surface temperature data sets are all key points undermined by these documents.

September Unemployment by Region and State

I have an interest in regional and state unemployment levels since I believe these levels are often indicative of government mandated policies, either pro-business or anti-business.  These rates are now available for through the end of September.  There are regional, geographical divisions (9 in the regions), and state unemployment numbers.  The national unemployment rate at the end of September was 9.8%, well above Obama's promised 8.0%.

By Region:

West, 10.6%

Midwest, 9.8%

South, 9.3%

Northeast, 9.0% [Most of the TARP money went here and much of the Stimulus Socialist Payoff Money]

By Geographical Division (Partial List):

Pacific, 11.6% [Bad business climate, few Obama Payoff Channels]

East North Central, 11.0% [Bad business climate]

East South Central, 10.4%

West South Central, 7.9%

The Highest Unemployment States:

Michigan, 15.3% [Cash for Clunkers did not do so much.]

Nevada, 13.3% [Harry Reid does not deliver what Nevada needs, private land.]

Rhode Island, 13.0% [Democrat socialist lock here for ages, bad influence of Brown University]

California, 12.2% [Over regulated and mandated expensive electricity]

South Carolina, 11.6% [Governor flies to Argentina and brings back no business?]

Oregon, 11.5% [Vote for Obama does not pay their bills?]

DC, 11.4% [High taxes, over-regulated, school holding pens, only good for lobbyists]

Florida, 11.0% [With home and 401K values down, no one retires?]

Kentucky, 10.9%

North Carolina, 10.8% [They deserve it, they voted for Obama.]
Alabama, 10.7%
Illinois, 10.5% [It does not pay to be crooked.]
Tennessee, 10.5% [Government-run TVA, Gore uses all the electricity]
Georgia, 10.1%

The Lowest Unemployment States:

North Dakota, 4.2% [Good business attitude, allow oil & gas development]

South Dakota, 4.8% [Good business climate]

Nebraska, 4.9%

Utah, 6.2% [Mormans work]

Oklahoma, 6.7% [Anderson Clan produces]

Iowa, 6.7% [Corn subsidies, ethanol subsidies?]

Virginia, 6.7% [Better paid Federal workers live here, good business climate]

Vermont, 6.7% [Dean delivers the payola?]

Wyoming, 6.8% [Good business climate]

Kansas, 6.9%

Colorado, 7.0% [Good business climate]

Well folks, it appears that the People of the Flyover States are better managers of the economy than are the elitist socialists of California, Illinois, Michigan, and the Northeast!  Unemployment went up 0.5% in Illinois in September over August.  The Pacific geographical area had the biggest one-year increase in unemployment of 4.2%.  Michigan had the biggest state increase in the last year of 6.4%, followed by Harry Reid's state of Nevada with a 6.0% increase.  Meanwhile, the record holder for the smallest increase in unemployment was the stalwart North Dakota.  Amazing what a good business climate and some oil and gas field development can do for a state economy!

The bottom line is that if a state has a good business climate, its unemployment rate in hard times will probably be decidedly lower than in the states with a bad business climate.