True, but…

Perhaps you’ve heard – Washington is the best state in America to start a business.  US News and World Report just the other day ranked us #1, ahead of Virginia, Colorado, Texas and Nevada (and all the other states of course).

The article rightly pointed out our productivity here, our adoption of alternative energy, and our tech-intensity.  Interestingly, it also said we are #1 among the states in adoption of energy efficiency, which runs counter to the conventional wisdom that our low energy prices make us naturally less likely to engage in energy efficiency projects than higher-cost states.

But…the article does what other articles and research reports have done over time: it recognizes the fact that we have no corporate (or personal)income tax as a good thing…but fails to recognize that we have something that is at least equally bad: the Business and Occupations tax.  The B&O of course is a tax on gross receipts, rather than net income.

I am not saying that we should have an income tax.

I am also not saying we have a bad climate for economic growth.  For many companies, especially certain types of tech companies, we have a great business climate.  This is largely due to the cluster of great companies and talent that are already here and that companies can collaborate and compete with.

But I am saying that any credible analysis of our business climate ought to recognize that the B&O exists.  Absent that, it is just bad information for people.


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