Over the past ten years, the United States has seen corporations move job after job overseas in search of cheaper labor. An equally large problem has been the corporate tax rate. Five years ago, the U.S. corporate tax rate of 39% was the sixth highest among Organization for Economic Co-operation and Development countries, according to the Tax Foundation. While other countries have lowered taxes, the U.S. rate hasn't budged, and today it has the highest rate among OECD countries, eclipsing former tax gougers such as Germany and Canada.
And when you start factoring in litigation costs, $250 billion per year or 2% of gross domestic product, it's amazing that any companies stay in the U.S. So, what is a company to do in this high-cost, antibusiness environment? Maybe minimize the damage by moving to a more business-friendly state.
To compile our listing of the best states for business, we ranked all 50 states on 30 metrics in six main categories: business costs, economic climate, growth prospects, labor, quality of life and regulatory environment. The data produced a clear No. 1. The Commonwealth of Virginia takes the crown in our first ever ranking of Top States for Business.
Virginia scored well across the board. In fact, it ranked in the top ten in all six big categories we looked at. No other state scored in the top ten in more than three categories. The individual metrics Virginia scored well in included taxes, where it ranked seventh, at 15% below the national average according to West Chester, Pa., research firm Moody's Economy.com. Pollina Corporate Real Estate, a commercial real estate consulting firm, examined each state's incentive programs for Forbes.com and found Virginia's to be second best behind South Carolina. That ranking combined with its solid tort climate propelled Virginia to the top spot in the regulatory environment category.