Yesterday, the Tax Foundation released its 2011 State Business Tax Climate Index. The study looks at five important tax areas: corporate taxes, individual income taxes, sales taxes, property taxes, and unemployment insurance taxes.
Pennsylvania ranked 26th overall. As the Tax Foundation explains, businesses will bring capital and labor to states where they have the greatest competitive advantage.
Pennsylvania ranked well on the individual income tax index (given our flat, and relatively low rate), and poorly on the property and unemployment tax indexes. Pennsylvania’s rankings for 2011 (1 being best) were:
- Corporate Taxes: 38
- Individual Income Tax: 14
- Sales Tax: 28
- Property Tax: 44
- Unemployment Insurance Tax: 42
Pennsylvania lawmakers should look at states with the best business tax climate (e.g. South Dakota, Alaska, Wyoming, Nevada, and Florida) to develop a better tax structure that encourages all companies to invest in Pennsylvania, instead of trying to bribe companies to move or stay here with corporate welfare.