There’s no job tougher on Earth than owning and operating a small business.
Small business owners are often described as people who are their own bosses and who work for themselves. But they don’t — not really.
They work for their customers, they work for their employees, they work for regulators at every level of government, and at the end of the year they work for the taxman.
New York and California may be two of the toughest states in the union in which to start a business due to onerous regulations, heavy labor union influence and crippling taxes.
But there are states in between — in flyover country — that actually welcome people that have a dream, lots of gumption and an entrepreneurial spirit.
Here is Newsmax’s list of the top 10, listed in alphabetical order.
The Sunshine State has enjoyed a heavy dose of new arrivals — especially from the northeast — for a lot a reasons, chief among them its low taxes. Florida has no personal income tax and its corporate tax rate tops out at a very moderate 4.5%, which the Tax Foundation ranks at No. 6 in the nation.
Florida is also a right-to-work state, meaning that union membership is not a requirement for employment. Median annual personal income is a moderate $59,227, which keeps labor costs at a manageable level.
Excessive business regulation is another factor. The Pacific Research Institute ranked Florida the ninth best state on its Small Business Regulation Index.
It’s not all lollipops and roses in Florida, however, given that it’s also subject to hurricanes. 2022 saw two storms — Hurricane Ian, which devastated parts of the Gulf coast, and Hurricane Nicole, which ravaged the Atlantic coast.
The Peach State is another business-friendly state, in part, by virtue if it being a right-to-work state.
It also has a nominal corporate tax rate and the Tax Foundation ranks Georgia right behind Flotida at No. 7 for best corporate rates.
Median personal income is at a moderate $61,980, however Georgia ranks at No. 35 for personal tax rates.
What makes the Hoosier State special is its business regulations — or rather lack of regulations. It came in at No. 1 on Pacific Research Institute’s Small Business Regulation Index.
The Tax Foundation ranked Indiana as the 13th best corporate tax state, and at No. 15 for personal income tax rates, on a median income of $57,603, and it’s a right-to-work state to boot.
In addition, Indiana businesses have a higher-than-average survival rate coupled with a cost of living that’s 15% lower than the national average, according to Forbes.
The Sunflower State came in as the 4th best state in the union for small business regulation by the Pacific Research Institute. That and the fact that it’s a right-to-work state indicates that it strives to be business-friendly.
Kansas comes in at No. 22 on personal income taxes against a medium annual income of $62,087. It comes in at No. 31 for corporate tax rate by the Tax Foundation.
The Show Me State is something of a tax haven for businesses, coming in at the third-best state for corporate tax rates. It doesn’t fare quite as well for personal tax rates, however, coming in at No. 21 on a median income of $57,409.
In addition, Missouri places a respectable No. 10 on Pacific Research Institute’s Small Business Regulation Index.
Although Missouri is not a right-to-work state, its residents enjoy a lower-than-average cost of living and businesses enjoy low filing fees.
Although Big Sky Country is not a right-to-work state, its moderate $57,153 median annual income helps keep labor costs low. Also, unlike some of the Gulf and southern Atlantic states, there is little chance of natural disaster to interrupt operations.
Montana ranks at No. 21 for corporate tax rates, and No. 24 for personal tax rates, according to the Tax Foundation.
Although the Roughrider State places No. 26 for state personal income taxes against a median $64,477 annual income, its more accommodating to businesses. Its corporate tax rate places No. 6, according to the Tax Foundation.
Two other indicators of North Dakota’s business-friendly environment is that it came in at No. 2 on Pacific Research Institute’s Small Business Regulation Index, and that it’s a right-to-work state.
North Dakota startups also benefit from funding, with new business owners receiving "the highest average funding per business in the nation," according to Forbes.
The Artesian State is all business under its current Gov. Kristi Noem. It ties with Mississippi at No. 7 on Pacific Research Institute’s list of the best states for small business regulation, and No. 1 on corporate taxes by the Tax Institute.
South Dakota also ties with Florida as No. 1 on state income taxes. It doesn’t have any, so its residents only have to account to Uncle Sam on their median $59,533 annual income.
Finally, South Dakota a right-to-work state.
Everything is supposed to be bigger in Texas, and that includes incentives to lure in business. It worked for Elon Musk, who moved Tesla from high tax California to the Lone Star State. But he’s among an average of 410 who make the move every day.
Texas comes in at No. 3 in Pacific Research Institute rankings of small business regulations, and is a right-to-work state.
The only things that work against starting a business in the Lone Star State is taxes: It comes in at No. 46 for corporate taxes, but tries to make up for it on individual taxes, coming in at No. 7, according to the Tax Institute. Texans bring in a $64,034 annual median income.
The Cowboy State came in No. 1 in a number of areas, according to the Tax Institute. It ties with Florida and South Dakota on personal income taxes — there aren’t any. And It’s also No. 1 on corporate taxes — the state doesn’t tax corporations either.
Even its state sales tax rate is moderate, coming in at 5.34%. However, businesses have to be prepared to pay a bit more for employees, who manage to wrangle in an annual median of $65,003, the 19th highest in the nation.
Michael Dorstewitz is a retired lawyer and has been a frequent contributor to Newsmax. He is also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter. Read Michael Dorstewitz's Reports — More Here.
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