Low Ranking on Small Business Policy Index Points to Need for Economic Reform
Hawaii is the fourth-worst state in the nation when it comes to policies that are friendly to small business according to a recent study by the Small Business and Entrepreneurship Council. The state ranked 47th overall with only New York, New Jersey, and California scoring lower. This score represents a drop from last year’s 46th place ranking.
The 2014 Small Business Policy Index considers 42 separate policy indicators in scoring and ranking each state. While the report did identify a few positives, such as the low property taxes, low corporate capital gains tax, low wireless taxes, and beautiful weather, the pros were far outweighed by the negatives that contributed to the state’s low score. In particular, certain very high taxes were cited as especially problematic for small business, such as the high unemployment taxes, high gas and diesel taxes, and state death tax. Moreover, Hawaii has the second-highest personal income tax rate and the highest consumption-based taxes. These high tax rates, combined with restrictive regulations (like the increased minimum wage) make Hawaii a difficult place for small businesses and entrepreneurs.
“Small businesses are the canary in the coal mine for a healthy state economy,” stated Keli’i Akina, Ph.D., President of the Grassroot Institute of Hawaii. “The fact that we are slowly suffocating small business and entrepreneurship should alarm those who are working for a brighter economic future in Hawaii.”
“With a new Governor in place and the legislative session about to start, it is time to embrace policies that foster entrepreneurship and encourage the growth of small business,” continued Dr. Akina. “Lowering taxes and cutting the red tape that makes Hawaii unfriendly to small business are the first steps toward creating a robust, self-sufficient economy.”