As far as advancement goes, it takes more than strong access to working capital to survive in the world of business. Financial success is paramount to helping a business survive and thrive, but prosperity comes down to more than that, according to a survey conducted by Chief Executive. The survey, which gathered responses from more than 500 CEOs around the U.S., found that business success differs from state to state. Each year, Chief Executive asks CEOs for their opinions on the best and worst states in which to do business, asking individuals to rank workforce quality, housing affordability, living environment and tax and regulatory policies.
Best states for business boast low tax rates
Texas came in first overall for the 10th year in a row, while Florida came in at No. 2, increasing its ranking over last year due to its high quality living environment. Here’s the list of the top states in which to run a company:
1. Texas
2. Florida
3. Tennessee
4. North Carolina
5. South Carolina
6. Indiana
7. Arizona
8. Nevada
9. Louisiana
10. Wisconsin
Texas came in first place for multiple reasons. Due to more flexible tax and regulatory policies, businesses tend to set up shop in the Lone Star State, which recently became home to a number of prominent large and small businesses. Florida, meanwhile, has improved its living environment significantly over the past several years, making it a desirable place to live and work. Low tax rates also contributed to this rise in popularity among CEOs.
“We’ve learned from Texas how to tell our story better and it helps that we’ve cut taxes 25 times – about $400 million,” Florida Governor Rick Scott told Chief Executive. “When companies like Hertz, Amazon, Deutsche Bank and Verizon add jobs here, it causes more people to look at us. Business is comfortable that we’ll keep the tax base low and improve our workforce.”
High tax rates make for tough business climates
The worst states in which to conduct business remained largely the same as last year. The top three were:
1. California
2. New York
3. Illinois
Why did these states rank so low on the list? First, California’s real estate market is simply too expensive for many entrepreneurs, making it difficult to establish oneself in a competitive market. Furthermore, its tax rates are extreme compared to other states – its highest marginal tax rate stands at 33 percent, making it the third highest tax rate among industrialized nations.
“California likes to say that Texas can have all those low wage jobs,” Richard Fisher, CEO of the Dallas Federal Reserve said, “but from 2000 to 2012, job growth percentage change by wage quartile was better in Texas.”
While running a business in any of these states is difficult, most entrepreneurs don’t have a choice as to where they can start or stay in business. Those with families and other commitments can hardly risk everything they have by picking up and starting over in a more business friendly environment. For that reason, lenders like National Funding exist in order to help companies make ends meet in the increasingly competitive world of business.
