The Tax Foundation has released its 2011 ratings of state tax business tax climates, and Oregon is holding its own at Number 14 – the same position as last year.
The non-partisan but conservative-leaning foundation ranks states according to five factors: corporate tax rates, individual income tax rates, sales taxes, unemployment insurance taxes and property taxes.
Different weights are assigned to each, with individual income tax rates counting the most and unemployment insurance tax rates the least. Oregon ranks high on sales tax (#4) and property tax (#5) but fares poorly on corporate tax (#45) and individual income tax (#46).
While stating that tax systems are important when business decide where to locate or expand, the foundation’s report concedes: “Clearly, there are many non-tax factors that affect a state’s overall business climate: its proximity to raw materials or transportation centers, its regulatory or legal structures, the quality of its education system and the skill of its workforce, not to mention the intangible perception of a state’s ‘quality of life.’”
Finance and economics analyst Daniel Indiviglio of TheAtlantic.com has some interesting musings on the rankings and what they mean – specifically, why Nevada and Florida, two of the states with the supposedly best tax climates for business (#4 and #5 respectively), have such dismal economies.
Florida has an 11.9% unemployment rate, Indiviglio notes, while Nevada is even worse – in fact, the worst in the country – at 14.4%. In contrast, New York, which according to the Tax Foundation has the country’s worst business tax climate, has an 8.3% unemployment rate.
“There are a few possible explanations” for the dismal showing of Florida and Nevada, Indiviglio speculates. “One is that these two states were very reliant on their housing markets. Since that industry continues to struggle, jobs have too.”
(The same, of course, would apply to Oregon – and especially Central Oregon.)
“Maybe [Florida and Nevada] aren't working hard enough to get the word out to businesses that they would fare better in their tax systems, or maybe they don't offer enough carrots to take on some of their relocation and infrastructure costs,” Indiviglio suggests.
Seems possible. It also seems possible that the constant right-wing moaning and whining about Oregon’s allegedly terrible business climate isn’t helping the economy bounce back here either.