According to the latest index from the Small Business & Entrepreneurship Council, South Dakota has the most entrepreneur-friendly policy environment in the U.S. The U.S. Business Policy Index evaluates each of the states on 46 policy measures with an emphasis on taxes, regulatory burdens and government spending.
What makes South Dakota so appealing? Taxes are a big part. The state has no income tax, capital gains tax, dividends & interest or estate taxes. It also boasts relatively low property tax rates as a share of personal income. The only key negative listed was high consumption-based taxes.
Following South Dakota in the top ten are: Nevada, Texas, Wyoming, Florida, Washington, Alabama, Utah, Colorado and Arizona.
Bringing up the bottom of the list were Maine (46th), New York (47th), Vermont (48th), New Jersey (49th) and California (50th).
The only positive listed for the Golden State was that it has the lowest unemployment taxes--heavily outweighed by a laundry list of high tax rates, corporate costs, government spending and debt.
Given the continued high rate of entrepreneurial activity in Silicon Valley and the rest of California, apparently entrepreneurs aren't so worried about the friendliness of a state’s policy environment.
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