The latest state business tax policy winners

October 28, 2023
Group of young workers celebrating business success_getty-images-fH0dsyd-7zM-unsplash2

Taxes play a part in a business' success. And states' tax structures can attract, or discourage, businesses' decisions to locate within their borders. (Photo by Unsplash+ in collaboration with Getty Images)

College football captures most sports fans' attention this time of year, but it's also prime time for baseball.

So, with the World Series underway, it seemed fitting that this weekend's first Saturday Shout Outs goes to an item that uses a baseball measurement to evaluate and compare business taxes in the country's 50 states and the District of Columbia.

As long-time readers of the ol' blog have already figured out, I'm talking about the Tax Foundation's annual State Business Tax Climate Index. It compares the jurisdictions' tax structures across more than 120 variables.

Analysts for the Washington, D.C.-based nonprofit tax policy organization acknowledge that its yearly study focuses on the tax how more than the how much. But inevitably, the data raises some questions, such as if certain states lead in the rankings, why aren't more companies heading for those places?

The Tax Foundation looks to answer that in its latest report. Jared Walczak, the group's Vice President of State Projects, explains:

"Tax competition is a little like WAR — not conflict, but Wins Above Replacement. The term comes from baseball, where it is intended as a sabermetric statistic to measure how many more wins a team can claim due to a specific player above the amount that would be generated by a replacement-level player. It's much the same way in public finance: a well-structured tax code won't make the Wyoming Basin a metropolis, nor will poor tax structure make Manhattan a ghost town. But tax structure does play a role in a state's economic successes or failures, and often a substantial one. Every state can benefit from a simple, neutral, transparent, pro-growth tax structure."

As mentioned, Walczak's preface earns today's first shout out. A second one goes, of course, to the full 2024 state business tax report.

Best, worst, and in-between: The state topping the best list, as you probably deduced from Walczak's intro, is Wyoming. The least attractive New Jersey. That seems to happen a lot.

The map below offers a visual preview of where all the states and Washington, D.C. stand.

2024-State-Business-Tax-Climate-Index-Rankings_Tax-Foundation

But you'll want to check out the full report to see where your state stands and why. The index's interactive web page also lets you sort states and types of taxation, and compare as you wish.

Just something to do if your football or baseball team falls behind today.

You also might find these items of interest:

 

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