The Tax Foundation, a Washington, D.C., tax policy study group, has released its annual assessment of state business climates. As usual, New Mexico ranks in the lower half of all states, at 38th. And as usual, some of the states with the best performing economies show up as having bad business climates when it comes to taxation.
I’ve always been skeptical of these kinds of studies because there is much more to a business climate than taxation. A high tax state might also be a state that has invested in good public schools and excellent public infrastructure. When I’ve asked companies that have located in New Mexico, they almost always talk about the quality of our work force as the major factor that brought them here, and they rarely mention taxation.
Here is how this year’s highest- and lowest-ranked states in the Tax Foundation study fared when it comes to unemployment. Unemployment rates in the best and the worst states in terms of business environment are about the same. (New Mexico’s unemployment rate was 6.6 percent.)
Rank and state Unemployment rate as of December
1. Wyoming 5.8 percent
2. South Dakota 4.2
3. Nevada 12.6
4. Alaska 7.3
5. Florida 9.9
6. New Hampshire 5.1
7. Washington 8.5
8. Montana 6.8
9. Texas 7.8
10. Utah 6.0
Average unemployment: 7.4
41. Iowa 5.6
42. Maryland 6.7
43. Wisconsin 5.8
44. North Carolina 9.8
45. Minnesota 5.7
46. Rhode Island 10.8
47. Vermont 5.1
48. California 11.1
49. New York 8.0
50. New Jersey 9.0
Average unemployment: 7.8
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