Toyota-Mazda and Nebraska’s Business Tax Climate Ranking

For the last 15 years, the Tax Foundation has issued its annual State Business Tax Climate Index. The Index isn't a ranking of how high our taxes are (we'd do even worse on that ranking).

Instead, it ranks states by how well their tax structure is designed to compete for business and economic growth. 

Here's a map of the new 2018 State Business Tax Climate Index, ranking Nebraska #25, down from 24 last year. That's the worst ranking among all our neighbors except Iowa. 

This release comes on the heels of disappointing but expected news that Nebraska will not be the site of a Toyota-Mazda auto assembly plant that will employ 4,000 workers. 

Notably, many states still in the running have made significant gains in the State Business Tax Climate Index in recent years.

Since we're talking about site selection, it's important to point out that unlike many rankings, the Index docks states for using tax incentives over broad-based improvements.

Just this year, Mississippi passed Nebraska thanks to business and personal income tax reforms. Their state already has a Toyota and Nissan plant, with room to expand.

Michigan, of course, knows a thing or two about cars. As the Wall Street Journal writes, tax reforms have helped bring the state out of a long recession. Over time, they've jumped all the way from the mid-30s on the Index to #12. 

North Carolina is also being considered. The state's workforce is growing, they have auto part suppliers, and responsible tax reforms have helped the Tarheel State improve from one of the region's high-tax states to #11 on the Index, better than all Southeastern states but Florida.

In fact, with the exception of Illinois, most of the states being considered are currently moving their policies toward less burdensome tax systems, more freedom for workers, and regulatory reforms. 

But big fish like Toyota-Mazda are far from the only reason Nebraska should keep its focus on tax reform and how it impacts our ranking on the State Business Tax Climate Index.

After all, there are 1.9 million people who already live here, with their own hopes and dreams.

These Nebraskans could be more productive and creative if fewer tax policy barriers stood in their way. And how working people feel about being able to achieve their goals in Nebraska is no small part of what major employers are looking for.

Photo by Tino Rossini