(Michael Chamberlain/Nevada Business Coalition) – While liberal legislators, activists and pundits have repeated the refrain that taxes and regulations don’t have anything to do with a business’s decision where to locate, there’s another group that believes it does – CEOs, the people who actually make those decisions.
Nevada ranked as the 10th best state for business in a survey of 550 CEOs by ChiefExecutive.net. The ranking was at least in part due to the absence of corporate or individual income taxes, a fact that would change under a tax proposal offered last week by Legislative Democratic leadership.
According to the report revealing the survey results,
Business leaders graded the states on a variety of categories grouped under taxation and regulation, workforce quality and living environment. “Do not overtax business,” offered one CEO. “Make sure your tax scheme does not drive business to another state. Have a regulatory environment and regulators that encourage good business—not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need. Rules that make it hard, if not impossible, to separate from a non-productive employee make companies fearful to hire or locate in a state.”
Not surprisingly, states with punitive tax and regulatory regimes are punished with lower rankings, and this can offset even positive scores on quality of living environment. While state incentives are always welcome, what CEOs often seek are areas with consistent policies and regulations that allow them to plan, as well as intangible factors such as a state’s overall attitude toward business and the work ethic of its population.
Neighboring California, the state far too many left-wing Nevadans apparently would like us to emulate, was 50th and last for the seventh straight year. As the report explained,
California, once a business friendly state, continues to conduct a war on its own economy. According to the Pacific Research Institute, it has the fourthlargest government of all U.S. states, with spending equal to 18.3 percent of GDP. The comparable figure for Texas is 12.1 percent. Survey respondents uniformly say the state’s regulators are hostile. “No one in his right mind would start a new manufacturing concern here,” said one California CEO.
Another item sure to raise the hackles of liberals is that Nevada’s high rate of union membership was one factor apparently working against the Silver State, which fell from #5 in the last annual survey.
Texas, also with no corporate or individual income tax and boasting a friendly regulatory environment, topped the list for the seventh consecutive year, followed by North Carolina, Florida, Tennessee and Georgia.
Instead of increasing the tax burden on Silver State businesses, our state and local governments could improve the business climate by relaxing some of their ridiculous regulations, such as those requiring daily overtime and a higher than federal minimum wage, and reduce some of the red tape businesses face at the local level.
(Michael Chamberlain is Executive Director of the Nevada Business Coalition.)