New State Business Tax Climate Index Making an Impact Already

October 17, 2013

Last week, we released our new 2014 State Business Tax Climate Index, which enables business leaders, government policymakers, and taxpayers to gauge how their states' tax systems compare. (Download PDF of the 2014 Index.) Today, I want to share some of the impact our report has already had, which is beyond our wildest dreams. Some highlights:

  • Within 24 hours, the Index was in 240 media outlets, including the Washington Post (they covered it in the first hour of release), the Wall Street Journal, Forbes, Bloomberg, Crain's, Investor's Business Daily, Yahoo! Finance, Dallas Morning News, Miami Herald, Sacramento Bee, Kansas City Star, Milwaukee Journal-Sentinel, San Francisco Chronicle, New Jersey Star-Ledger, Las Vegas Review-Journal, Charlotte Observer, Hartford Courant, and so on. By Friday, virtually every paper of record in the United States had covered the Index.
  • Five governors held press conferences or put out statements praising us and our report: Scott Bullock (D-MT), Dennis Daugaard (R-SD), Jay Nixon (D-MO), Mike Pence (R-IN), and Rick Scott (R-FL).
  • One governor didn't want to talk about it but was forced to when reporters following him at a ribbon-cutting wouldn't let up. A spokesman for Gov. Andrew Cuomo (D-NY) responded that things are actually great in New York and that our analysis wasn't "objective." Similarly, Gov. Nikki Haley (R-SC) responded that the report showed South Carolina has work to do, and Gov. Rick Perry (R-TX) responded Texas was still a great place to do business, despite his state falling out of our top ten.
  • Our report sparked a healthy debate online between blogger Matt Yglesias, who asserted that taxes don't affect business decisions, and many people who disagree with him on that. Governing joined in with a bunch of graphs and regressions parsing a one-year snapshot of data with our rankings. From my perspective, we've advanced the debate if we're arguing about how taxes can best promote economic growth, instead of debating who deserves to be rewarded or punished with the tax code.
  • My colleague Scott Drenkard did 20 radio interviews in 2 days, while he and I split scores of print interviews. I handled the calls from state legislators, many of whom are looking for ideas to make their tax codes simpler, smarter, and more pro-growth. (On a side note, I want to thank an unsung hero – our communications manager, Rich Borean – who scheduled all this stuff and kept us hopping).
  • The Index was "liked" 4,700 times on Facebook, and downloaded tens of thousands of times.

It's hard to pick a favorite from all of this, and my choice is an odd one: a piece by the Editorial Board of the Duluth News Tribune in Minnesota. Duluth may not be New York City but they recognize their state's policies are harming job creation and investment (and they praise us in the process):

Liberal-minded Northlanders might be quick to disregard the Tax Foundation and its determinations and views. Despite its efforts to remain nonpartisan and its clean listing at sourcewatch.org, the Tax Foundation sometimes is labeled as right-wing extreme or libertarian, probably because of its advocacy for reducing the tax burden on all. The nonprofit has been around since 1937, however, suggesting its message, analysis and revelations about how much Americans are being taxed are more than heard; they’re respected.

Regardless of the source, warnings about Minnesota’s taxes and business climate demand serious consideration — in St. Paul and across the state, and especially in border cities like Duluth.

In May, billboards went up near Minnesota’s western border, touting North Dakota as “open for business.” The suggestion was that Minnesota wasn’t because of taxing and spending decisions made by the DFL-controlled 2013 Legislature. The Minnesota Chamber senior vice president told the News Tribune Opinion page at the time that, “We raised the price of doing business in Minnesota this legislative session.”[…]

No matter who’s spinning it or ranking it, Minnesota, like other states, has good reason to be concerned about its business climate. A strong, tax-friendly, business-friendly environment equals jobs, which equals prosperity and a healthy economy. State leaders have more than enough motivation to seriously consider every bit of criticism and praise and then to act accordingly. The index released this week by the Tax Foundation was only the latest bit of concern. How will lawmakers respond?

I've received a number of congratulations for our impact this week, but the real thanks go to all of you who donate to support our work.


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