The current national recession has taken a toll on many states and Missouri is no exception. The Show-Me State has experienced a decrease in the size of our workforce over the past two years as a result. Some individuals and groups are trying to attribute this decline to an “unfriendly” business climate in the state, but I disagree. When considering a state’s business climate, there are several factors involved in determining the costs and benefits of doing business in one state versus another. Factors include utility prices; health care costs; crime rates; the skills and productivity of the workforce; and a myriad of taxes, including corporate income, personal income, capital gains, property, sales, unemployment and gasoline. Looking at the list of factors, it is quite apparent that one component that weighs heavy on the business climate is the size of a state’s tax burden. In fact, states with the lowest levels of taxes on personal income, capital gains, and corporate income are deemed better for business. So let’s take a look at how Missouri compares to other states regarding tax burden. Missouri actually has one of the lowest tax burdens in the United States. According to data compiled from the U.S. Census Bureau, the Show-Me State boasts the 46th lowest corporate income tax burden per worker in the United States. Missouri has the 35th lowest unemployment insurance tax burden per worker and we offer the 26th lowest worker compensation tax burden in the nation. The state’s overall business tax burden — a combination of corporate income tax, unemployment insurance and workers compensation taxes — ranks 48th in the nation. That means that only two other states have a lower business tax burden than Missouri. There are also other factors that make Missouri less taxing. Voters must approve most increases in state and local taxes, Missouri only taxes income earned in the state and we’re one of only five states that allows a deduction of federal income tax from state-taxable income. Based on tax burden and other factors, Missouri does possess a friendly business environment. So, can the change in the size of our workforce really be due to an “unfriendly business climate?” I don’t think so. Interestingly enough, based on information gathered from the U.S. Census Bureau, the Department of Economic Development discovered that of the 10 states that have experienced job gains during this recession, only a few are considered low tax burden states. Only three states were in the bottom third in terms of total tax burden and business tax burden per worker: Florida, Nevada and South Dakota. Only two states ranked in the bottom third in terms of unemployment insurance tax burden per worker: Florida and South Dakota. And only two states were in the bottom third in terms of worker compensation tax burden per worker: Hawaii and Nevada. Conversely, of the 16 states that experienced job losses of 50,000 or more, many were low tax burden states. Seven of these states ranked in the bottom third in terms of total tax burden per worker, including Ohio, Georgia, Indiana, Colorado, Missouri, Texas and Tennessee. Four states were in the bottom third in terms of business tax burden per worker: Colorado, Georgia, Missouri and Texas. Missouri is also tax friendly to individuals. Taxes on personal income here are below the national average. In fact, Missouri’s state and local taxes, as a percentage of personal income, rank an impressive 38th nationally. When looking at what a state’s residents pay in state and local income taxes, such as property taxes, sales taxes, luxury taxes and fuel taxes, Missourians pay a modest 9.2 percent of their income. This compares to a slightly higher national average of 9.7 percent, according to the Tax Foundation. Contrary to the assertion that the size of Missouri’s workforce has decreased because of an unfriendly business environment, Missouri’s business climate actually ranks about average to slightly above average in comparison to other states. I believe that Missouri already possesses a friendly business environment, but we must all work hard to ensure that our businesses have the kinds of advantages they need to keep Missouri competitive in the new high-tech economy. As a result, we believe Missouri will be well positioned for success as we emerge from the mire of the national recession.