Chief Executive's annual "Best and Worst States for Business" list got a lot of play in the Illinois media last week because the magazine's survey of 651 CEOs ranked Illinois 46th in the nation in terms of "business friendliness." Rich Miller argued convincingly at the Capitol Fax yesterday that solving the state's budget crisis as soon as possible, thereby avoiding another year of instability regarding regulations and tax rates, would do a lot to calm the nerves of business owners.
Digging into the tax climate rankings might also provide some clues for how state lawmakers looking to attract new investment should proceed. While Illinois ranks 10th for its individual income tax rate and 27th for its corporate income tax rate, the CEOs were far less bullish on the state's property tax (39th) and sales tax (41st) climate. Comprehensive tax reform measures like HB 174 would lower the property tax burden and modernize the state's sales tax. In exchange, the General Assembly would (marginally) raise income taxes on individuals and businesses. That's a trade-off that might improve both the state's finances and its attractiveness to commerce.