NFIB’s national index lumps Minnesota into the lowest-scoring region.
NFIB’s Small Business Optimism Index remained essentially unchanged from August to September, gaining just 0.2 points to bring the reading to 96.1. NFIB Chief Economist Bill Dunkelberg says small business optimism “continues to be stagnant, which is consistent with the expected economic growth of about 2.5 percent.”
Worse still for Minnesotans, NFIB’s index was also broken down by geographic region, and “The Plaines”, which includes Minnesota, had the lowest rating in the country.
That might not be a surprise to Minnesota’s small business owners.
Minnesota received an F for its tax code in a recent Thumbtack survey that broke down results in the categories of business friendliness and business sentiment. What’s more, surveyed small business owners gave their state a D+ for regulations, health and safety, environmental, employment, labor and hiring.
When it comes to taxes, NFIB Minnesota State Director Mike Hickey said that the fourth highest top individual income tax rate of 9.98 percent hits NFIB members the hardest because the vast majority “are flow-through companies, as you likely are, and pay all their company’s income tax on the individual income tax.”
On top of that, Minnesota is similarly unfavorable when it comes to the estate tax, he says.
“While an increasing number of states don’t even have an estate or death tax, Minnesota has one and is way out of sync with the current federal exemption of $5.43 million per person,” Hickey said. “We are phasing into a meager $2 million per person exemption in 2018 and this creates a real problem for a lot of us small businesses and farms.”
One of the key findings of the NFIB report shows more owners citing the difficulty of finding qualified workers as their “most important business problem.” That makes it third on the small business owners’ priority list, behind taxes and regulations.
NFIB’s Research Foundation gathered data on small business economic trends with monthly surveys of its membership. The September 2015 small business economic trends report drew from a sample of 3,938 small business owners, with 556 usable responses received.
