Think tank: New York has the worst business climate in the nation because of taxes
The Tax Foundation, a "non-partisan tax research group", has released its annual "business climate" index -- and New York State is at the bottom.
How the index is compiled:
The State Business Tax Climate Index, now in its 9th edition, collects data on over a hundred tax provisions for each state and synthesizes them into a single easy-to-use score. The states are then compared against each other, so that each state's ranking is relative to actual policies in place in other states around the country. A state's ranking can rise or fall significantly based not just on its own actions, but on the changes or reforms made by other states.
Why New York is at the bottom:
Despite moderate corporate taxes, New York scores at the bottom this year by having the worst individual income tax, the sixth-worst unemployment insurance taxes, and the sixth-worst property taxes.
Here's the index profile for New York.
The other members of the bottom five, in ascending order: New Jersey, California, Vermont, Rhode Island. The top five, in descending order: Wyoming, South Dakota, Nevada, Alaska, Florida.
The full report is embedded after the jump.
It's no secret that New York could have lower taxes -- the property taxes alone in some municipalities are crushing. But just out of curiosity, we thought it might be interesting to compare the Tax Foundation's list against a list GDP per state...
State GDP vs. tax index rank
GDP figures (actually, Gross State Product) are for 2010 and from the federal Bureau of Economic Analysis and were pulled from the listing in Wikipedia. The Tax Foundation ranks are for fiscal year 2013. Your mileage may vary.
Tax Foundation report
Tax Foundation State Business Climate Index 2013
map: Tax Foundation
Hi there. Comments have been closed for this item. Still have something to say? Contact us.
Comments
These types of scales are practically useless for a variety of reasons, most notably because they're defining a positive "business climate" as "ability of owners to maximize profits and minimize collective responsibility."
I also wonder how this scale measures up to availability of skilled and professional labor, quality of life, and available state services.
... said ktvorwald on Oct 9, 2012 at 3:07 PM | link
When AOA writes "just out of curiosity, we thought it might be interesting to...," you know you're in for a thought-provoking post. Thanks for taking a closer look at the Tax Foundation index, especially when other media just rehash the press release.
... said Bob on Oct 9, 2012 at 3:37 PM | link
@ #1 Agreed.
Only taking taxes into account does not give an accurate picture of overall "business climate." For example, south dakota, montana, wyoming and utah are ranked high, yet no one would exactly say they have a "great business climate."
... said hock41 on Oct 9, 2012 at 3:38 PM | link
Perfect - now who wants to start a business in Wyoming? Anyone?
... said Lineberry on Oct 9, 2012 at 4:07 PM | link
Your comparison is complete bunk since tax policy can change immediately, while its wealth-destroying ramifications may take decades.
Compare this business climate ranking to a ranking of internal US immigration, and you'll find just as strong of a correlation showing that taxes = people leaving.
Taxes are literally destroying new york state from the inside out, so if you want to make some kind of half-baked political statement in defense of a shitty business climate, just make sure you know where those policies are inexorably leading us. And would the last to leave please turn off the lights?
... said Ike on Oct 9, 2012 at 5:40 PM | link
I do find it ironic, though, that the Tax Foundation describes itself as "informing Americans about the size of tax burdens," yet it does not share in those 'burdens' because it's an independent 501(c)(3) non-profit organization that pays no taxes.
... said Bob on Oct 9, 2012 at 6:59 PM | link
Ike and the non-tax cost of living upstate is still fairly low, and population is still dropping. The cost of living in the city is astronomical, and the population there is rising.
... said BBnet3000 on Oct 9, 2012 at 8:51 PM | link
I'd also like to point out another reason why low taxes don't equal growth. Wisconsin, north carolina, and minnesota are some of the fastest growing states in the country and yet they all are in the "most-taxed" braquet.
Meanwhile, florida and nevada, which have low taxes, are still in a housing crisis to this day.
... said hock41 on Oct 10, 2012 at 9:27 AM | link
for every one person who leaves nyc, there are 3 kids fleeing the low taxes and conservative morality of the south and midwest waiting to replace them. the population of nyc area is continuing to expand. how does that fit into the argument of high taxes causing population to leave when our population is expanding? New York has always been a gateway to this country. as someone moves out, throughout history to this day, even more people have arrived to move in.
... said m willett on Oct 10, 2012 at 10:49 AM | link
I'm with Bob. Thank you, AOA, for being the best source of thoughtful journalism in the Capital Region.
... said Erin on Oct 10, 2012 at 1:35 PM | link
You guys can say all you want about the population of New York State staying the same due to influx of downstate population, but the numbers simply don't bear it out.
New York state lost a *NET* 1.6 million residents between 2000 and 2010, the absolute WORST in the country.
http://www.insideronline.org/summary.cfm?id=15816
... said ike on Oct 10, 2012 at 5:32 PM | link
Gee, a foundation subsidized by the Koch brothers declares NY to be the worst state for business in the country. Why should anyone care?
... said Joseph on Oct 13, 2012 at 7:12 PM | link