PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

In the States: New York Policy Climate Wipes Out Other Positive Benefits

By at 31 May, 2018, 11:03 am

 

by Raymond J. Keating-

Small Business Policy Index 2018: New York ranked 47th – or fourth worst – among the 50 states.

SBE Council’s “Small Business Policy Index 2018” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements. 

Small Business Tax Index 2017: New York ranked 43rd – or eighth worst – among the 50 states. 

SBE Council’s “Small Business Tax Index 2017” ranks the states according to 26 different tax measures. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

The state of New York offers a lot. I experienced that firsthand over the Memorial Day weekend and the following Tuesday. A family getaway Memorial Day weekend led to a drive from Long Island – with its wonderful beaches – up to the Catskill Mountains, eventually enjoying assorted offerings in the Cooperstown area, including the National Baseball Hall of Fame, catching the Hall of Fame Classic game at Doubleday Field, art collections at the Fenimore Cooper Museum, an outdoor concert, a spectacular dinner at the Otesaga Resort Hotel, and combing through some great bookstores. And on Tuesday evening, I was in the midst of the energy of New York City, attending an evening, rooftop, Manhattan book party for Jim Blasingame, the Small Business Advocate, and his new tome The 3rd Ingredient.

Yes, New York has a great deal to offer. Unfortunately, the state also offers one of the most hostile public policy climates for entrepreneurs, businesses of all types and sizes, investors, and employees.

Poor ranking for small business and entrepreneurship

In fact, according to the Small Business Policy Index 2018: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, which I write for the Small Business & Entrepreneurship Council, New York offers the fourth worst public policy climate for entrepreneurship and small business among the 50 states.

The “Small Business Policy Index” arguably offers the most comprehensive comparison of the states in terms of policy decisions affecting the economy.  Of the 55 measures included in this 22nd edition of the Index, 27 are taxes or tax related, 20 relate to rules and regulations, 5 deal with government spending and debt issues, with the 3 remaining measures gauging the effectiveness of important government undertakings.

Indeed, the list of policy negatives for New York stretches far longer than the many positives in the Empire State. For example, New York has high personal income, individual capital gains, corporate income, corporate capital gains, property, consumption-based, gas, diesel and wireless taxes. It also imposes a death tax. New York lays claim to the most burdensome energy regulatory burden; an added minimum wage burden; high workers’ compensation costs; and is not a right-to-work state. For good measure, the state has a high level of state and local government workers; the highest level of state and local government debt; and the second highest level of state and local government spending. To sum up, New York fails when it comes to taxes, regulations, and government spending and debt.

However, at least the state does have a low crime rate.

What does NY seem to do best?

Unsurprisingly, it turns out that New York’s top export is people, with the state losing more than 1 million people net to other states. For good measure, in six of the last seven years (from 2011 to 2017), New York’s economy has grown at a markedly slower rate than the nation as a whole – and that’s saying something considering how anemic national growth has been.

As long as policymakers insist on taxing and regulating entrepreneurs and small businesses to death, no matter how beautiful parts of the state might be, New York will continue on its long relative decline in terms of population, business development, entrepreneurship and economic growth.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

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