In its recently released 2011 State Business Tax Climate Index, the Tax Foundation assesses five major state business taxes. States that do not levy a personal income tax fare particularly well in the study, as this tax is weighted most heavily in the analysis. The study ignores the important question of how taxes are spent in each state, which has important implications for any state’s overall business climate. This omission makes it important to view the analysis in the narrow terms of business tax climate, which is something altogether different than business climate.
