In recent years, there has been a mass exodus of firms leaving California and heading to Texas and other states for better tax climates. This trend is indicative of the vastly different tax setups of each state within the United States. In order to ascertain which states are the best for business it is first important to outline what aspect of tax codes make a state more desirable for businesses.

Among the factors that position states in a favorable position include their income tax codes and corporate income tax. States without income tax are favorable because they allow for workers to take home a larger percentage of their pay. Moreover, corporate income tax describes the taxes a business must pay. In only two states is the corporate income tax not levied: Wyoming and South Dakota. That, and the combined absence of income tax, positions both Wyoming and South Dakota to be the best states for a business to operate in. Other factors that influence a businesses success include the presence or absence of a sales tax, franchise tax, and the size of the property tax. Based upon these factors, the top ten best states for a business include the following: Wyoming, South Dakota, Alaska, Florida, Montana, New Hampshire, Nevada, Oregon, Utah, and Indiana.

The states that fare worse on all of these accounts include Louisiana, Iowa, Maryland, Vermont, Minnesota, Arkansas, Connecticut, California, New York, and New Jersey. A common thread that makes these states less favorable include high income taxes, high corporate tax rate, high sales tax rate, and the presence of an estate and inheritance tax. The culmination of these factors stifles the business market in these states.

The trend of California based businesses relocating to Texas reveals that business moguls are no longer willing to suffer through high tax rates and jump through hoops to simply exist in a market like the ones in California. It is clear that businesses are now trying to position their firm in a market where they can generate the most profit without having to lose a significant portion of their income to taxes. Therefore, when it comes to starting a business, its imperative that an individual researches the state they plan to open in, or alternatively select a better state to operate in. President Trump has worked hard to try to improve the economy for businesses, but his efforts have been limited as there is much opposition.