Tax Rates Aren't What Small Business Owners Say They Really Care About

While low taxes are seen as the silver bullet of economic development for many in the small business and conservative communities, a new report finds that tax rates are not the most important factor in determining how entrepreneurs perceive the business friendliness of their state. In fact, small business owners say that the two most important factors in how friendly state and local governments are to business are ease of professional licensing and ease of filing taxes—not how much they end up paying in those taxes.

These are the results of the third annual survey of 12,000 small business owners from Thumbtack, an internet marketplace for local businesses, and the Ewing Marion Kauffman Foundation, released earlier this month. The survey tracked responses to questions about the role of government and government policies—such as taxes, licensing, and training programs—across 38 states and 82 metro areas.