A national survey ranks Iowa 44th among the 50 states for small business. The 2002 “Small Business Survival Index” compared states based on 20 factors including personal and business taxes, property and estate taxes, utility costs, and the number of state employees. Darrel McKigney, a spokesman for the Small Business Survival Committee, says Iowa has fairly high taxes, from capital gains and corporate income tax rates to above-average property taxes and what he calls labor taxes. He says a state minimum wage is just another kind of tax on business since it raises costs and it allows no adjustments between places with a high cost-of-living and those where it’s low. McKigney says though it’s placed 44th overall, Iowa has several factors that reflect well. He says utility costs are low, sales and excise taxes are below average and the state gas tax is about average. He says Iowa’s not a bad state, he says, but has some factors that drag it down. The group’s website lists factors used to rank the states, and counts a right-to-work law as a plus. McKigney says the skyrocketing cost of health care is a factor that hurts small businesses in many states. He says many small businesses can’t buy into big health insurance packages, and some options are limited, like “medical savings accounts.” At the bottom of the rankings are Minnesota, Maine, Hawaii and the District of Columbia. South Dakota’s ranked number-one. McKigney, a conservative former state lawmaker who once headed the anti-tax Minnesota Taxpayers League, says the Small Business Survival Committee wants states to “free up the marketplace” with fewer regulations.
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