After the defeat of their health care plan, Republicans are expected to move on to a new issue: tax reform. While the specifics are still hazy, President Trump has promised major tax cuts across the board, propelling a bullish stock market to new heights. He's even suggested that the corporate income tax rate could fall as low as 15 percent (it's currently 35 percent).
Before the debate over the federal tax code engulfs Washington, Credio, a finance and investing research site by Graphiq, took a closer look at state-level taxes. Specifically, the data experts investigated which state's tax systems have become more business-friendly.
To determine which states are becoming more welcoming to businesses, Credio turned to the Tax Foundation's State Business Climate Index. Every year, the Tax Foundation assigns a score to each state based on five taxes: the corporate tax, individual income tax, sales tax, unemployment insurance tax and property tax. A rank of one is most business-friendly, while 50 is worst. Credio looked at the scores from 2012 and 2017 and ordered states by their change in rank. For context, Credio also included each state's 2017 ranking on the corporate tax and individual income tax. For more details on the Tax Foundation's State Business Tax Climate Index, including each state's tax ranking across the five different categories, click here.
Several Southern states fared poorly in the list. Kentucky and Alabama tumbled the most over the six-year period, each dropping 12 places. Conversely, the most-improved state climbed a whopping 33 spots, and now ranks as the 11th best state for business based on taxes. That state's rise is largely driven by decreases in its individual, corporate and sales tax rates. Again, it's important to note that states are ordered here by their improvement (or decline) in how business-friendly they have become, not by their overall rank.
Keep in mind that taxes are but one factor influencing how business-friendly a state is. Other considerations can include a state's labor regulations, transportation infrastructure and health care system.
Note: Ties are broken by the change in ranking of each state's individual income tax between 2012 and 2017.
Compiled by Alex Greer, Credio.com
