It is quite the fashion to rank states by "tax burden" or how "business-friendly" they are. But are these the only criteria for determining where to live or headquarter a business?
CNN published several lists of the Fortune 500, and with a bit of wandering I found the number of Fortune 500 headquartered in each state. I used the "Pick a state" section of "Fortune 500 2011: States: California Companies".
I found tax rankings at "The Tax Foundation - Facts and Figures Handbook: How Does Your State Compare?".
I put this data in a spreadsheet and tried to figure out a correlation. I found this difficult because there is such a wide discrepancy between corporate headquarters and "low tax" states. For example, the Tax Foundation ranks New York third in "tax burden" but it has the headquarters of 57 of the Fortune 500 companies, and Texas is ranked 32nd with 51 companies. The external factors could be that New York is the "financial capital" of the U.S. and that Texas has the most oil and related companies.
I finally sorted them by "tax burden" and then summed the number of Fortune 500 companies per state for groups of 10. Starting with the "worst ten tax states", the totals were 208, 79, 96, 93, and 20.
Other external factors could include that Arkansas has four Fortune 500 companies because Sam Walton lived in Arkansas and the other three companies have a lot of business with Wal-Mart. I don't know. Or what influence do physical geography, economic geography (like rural vs. urban), social environment (cosmopolitan vs. distrust of "outsiders"), and historical factors have. It would take a few volumes to figure all of this out.
Oh, yes, how about a high "tax burden" making a state a better place to live - parks, schools, excellent infra-structure, transparent government, and on and on?
But the "bottom line" is that "tax burden" is only one factor of many in determining the success of businesses and the quality of life in any give state.
