Christie’s NJ & Cuomo’s NY Ranked Worst for Business Tax Climate
(CNSNews.com) – Seven of the 10 worst states in terms of business tax climate are run by Democrat governors while seven of the 10 best business tax climate states are headed by Republican governors, according to data from the Tax Foundation.
New Jersey, among the worst and ranked 49th, is headed by GOP Governor Chris Christie, who is often named as a potential 2016 Republican presidential candidate. In 50th place is New York, headed by Democrat Gov. Andrew Cuomo, also a potential 2016 candidate.
According to the Tax Foundation, the 10 states with the best business tax climate are:
1. Wyoming, Governor. Matt Mead (R)
2. South Dakota, Governor Dennis Daugaard (R)
3. Nevada, Governor Brian Sandoval (R)
4. Alaska, Governor Sean Parnell (R)
5. Florida, Governor Rick Scott (R)
6. Washington, Governor Jay Inslee (D)
7. Montana, Governor Steve Bullock (D)
8. New Hampshire, Governor Maggie Hassan (D)
9. Utah, Governor Gary Herbert (R)
10. Indiana, Governor Mike Pence (R)
The 10 states with the worst business tax climate are:
41. Maryland, Governor Martin O’Malley (D)
42. Connecticut, Governor Dannel Malloy (D)
43. Wisconsin, Governor Scott Walker (R)
44. North Carolina, Governor Pat McCrory (R)
45. Vermont, Governor Peter Shumlin (D)
46. Rhode Island, Governor Lincoln Chafee (D)
47. Minnesota, Governor Mark Dayton (D)
48. California, Governor Jerry Brown (D)
49. New Jersey, Governor Chris Christie (R)
50. New York, Governor Andrew Cuomo (D)
The Tax Foundation’s 2014 State Business Tax Climate Index calculated its findings by “comparing the states on over 100 different variables in the five important areas of taxation (major business taxes, individual income taxes, sales taxes, unemployment insurance taxes, and property taxes) and then adding the results up to a final, overall ranking."
"This approach rewards states on particularly strong aspects of their tax systems (or penalizing them on particularly weak aspects) while also measuring the general competitiveness of their overall tax systems," says the Tax Foundaiton. "The result is a score that can be compared to other states’ scores.”
For the top ten ranked states, “the absence of a major tax is a dominant factor in vaulting many of these ten 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,” according to the study.
Adversely, the bottom ten states suffer from “complex, non-neutral taxes with comparatively high rates,” according to the study. Seven of the worst 10 states are run by Democrat governors. These states will be less likely to attract businesses and entrepreneurs because of their poor tax system. However, “[s]tates with the best tax systems will be the most competitive in attracting new business and most effective at generating economic and employment growth,” the report states.
Economist Charles Tiebout stated decades ago that “if citizens were faced with an array of communities that offered different types of levels for public goods and services at different costs or tax levels, then all citizens would choose the community that best satisfied their particular demands, revealing their preferences by “voting with their feet.”
This apparently is happening today as many people have fled New York and California for more tax-friendly business climates.
However, states with Republican governors in the bottom ten have some hope. Gov. Scott Walker of Wisconsin has passed Act 10, which limits the bargaining power of unions and will save taxpayers a reported $2 million. The Mercatus Center’s Freedom in the 50 States study predicts that this will help improve Wisconsin’s tax burden rank.
New Jersey may soon elevate out of 49th place according to promises made by Gov. Chris Christie, a potential presidential candidate. Former mayor of New York, Rudy Giuliani said of a 2016 Christie run, “he’s exactly the kind of public servant we need.” The Tax Foundation’s report states that Christie has vowed to keep New Jersey out of last place in the index.