Is Your State Going To Recover?

 Posted by on June 14, 2012  Taxes
Jun 142012
 
Red_and_Blue_States_(1992-2008)

Did you know that as an individual taxpayer, you owe the federal government over $138,000? Consult the U.S. Debt Clock and you’ll see that every day that number increases. Some citizens are comfortable with this. Others citizens are very uncomfortable with it. Where do you stand?

Since 2009, the Democratic party has made it clear where they stand. Promoting a liberal-socialist philosophy, they have consistently called for higher taxes and more government spending. Additionally, they hammer business regularly, as if profit is a terrible thing. The problem with this anti-capitalism ranting is that businesses are critical to the success of America. Profit allows a business to expand and hire more workers. And given the current condition of America, more jobs would be a good thing. Yet, Democrats call for more taxes and bad-mouth business. Is that the right approach? Below is a chart ranking states relative to their business climates.

The generally accepted color label for states is based on the average margins of victory in the five presidential elections between 1992 and 2008. Purple states are states that can’t be labeled red or blue and are commonly called “battleground” states.

Using the currently accepted definition, note that six red states (Wyoming, South Dakota Alaska Montana, Texas and Utah) rank in the top ten for business climate. Two purple states (Nevada and Florida) and two blue states (New Hampshire and Washington) round out the  top ten. On the other side of the scale, nine of the bottom ten least business-friendly states (Iowa, Maryland, Wisconsin, Minnesota, Rhode Island, Vermont, California, New York and New Jersey) are blue states.

Is it a coincidence that these traditionally Democratic states constantly generate news about their out-of-control state budgets? Is it coincidence that spending increases, taxes, fees for services, fines and penalties are consistently on the legislative agenda while spending cuts are labeled barbaric and ignored? Is it coincidence, for example, that Maryland (42nd) has lost some 3,500 businesses since 2006? Or that California (48th) has 11% unemployment, a $16 billion budget deficit and the nation’s worst credit rating?

Everyone should take time to consider their state. What party is historically in charge? What party is in charge now? Has there been significant changes in the last few years or recently (in mid-May Maryland passed a massive tax hike and re-defined “rich” as individuals earning $100,000) and are these changes good or bad for businesses or the citizens? Ask yourself why the recent changes were passed. Consider the neighboring states. Are these states in better or worse shape than your state? What are the reasons?

Where does your state rank? More importantly, where do you want it to rank?

2012 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

20

16

18

41

11

6

Alaska

4

27

1

5

28

13

Arizona

27

28

17

50

1

5

Arkansas

31

36

27

38

17

18

California

48

43

50

40

13

17

Colorado

16

20

16

44

23

9

Connecticut

40

25

31

30

32

50

Delaware

12

50

28

2

3

14

Florida

5

12

1

19

5

24

Georgia

34

9

40

12

22

39

Hawaii

35

4

41

31

30

15

Idaho

21

19

26

23

48

2

Illinois

28

45

13

33

43

44

Indiana

11

18

10

11

16

11

Iowa

41

48

32

25

35

36

Kansas

25

35

21

32

6

28

Kentucky

22

26

25

8

47

19

Louisiana

32

17

24

49

4

23

Maine

37

47

30

10

40

38

Maryland

42

14

46

9

45

40

Massachusetts

24

34

15

17

49

47

Michigan

18

49

11

7

44

30

Minnesota

45

42

44

36

34

26

Mississippi

17

11

19

28

8

29

Missouri

15

8

23

26

9

7

Montana

8

15

20

3

20

8

Nebraska

30

33

29

27

12

37

Nevada

3

1

1

42

42

16

New Hampshire

6

46

9

1

39

41

New Jersey

50

39

48

46

25

49

New Mexico

38

38

33

45

14

1

New York

49

23

49

37

46

45

North Carolina

44

29

43

47

7

35

North Dakota

29

21

35

15

31

4

Ohio

39

22

42

29

10

33

Oklahoma

33

7

38

39

2

12

Oregon

13

31

34

4

33

10

Pennsylvania

19

44

12

21

37

42

Rhode Island

46

40

36

24

50

46

South Carolina

36

10

39

20

38

21

South Dakota

2

1

1

34

41

20

Tennessee

14

13

8

43

27

48

Texas

9

37

7

35

15

31

Utah

10

5

14

22

24

3

Vermont

47

41

47

14

19

43

Virginia

26

6

37

6

36

27

Washington

7

30

1

48

18

22

West Virginia

23

24

22

18

26

25

Wisconsin

43

32

45

16

21

32

Wyoming

1

1

1

13

29

34

Note: The 2012 Index represents the tax climate of each state as of July 1, 2011, the first day of the standard 2012 state fiscal year. Rankings do not average across to total. States without a given tax rank equally as number 1.
Source: Tax Foundation.org

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