Report: U.S. Trending Downward as Best Place For Entrepreneurs
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According to the latest edition of the Doing Business report published by the World Bank and the International Finance Corporation, the United States remains the fourth-best place country in the world for small- and medium-size businesses following Singapore, Hong Kong, and New Zealand. The report compares laws and regulations entrepreneurs run into when starting and operating a business: business registration; acquiring permits; enforcing contracts; paying taxes; getting credit; ease of international trade; etc.
While the U.S. has a high ranking, policymakers should be concerned for two reasons:
- Out of ten categories the World Bank measured, the U.S. failed to improve its ranking in any of them. Instead the U.S. fell in seven and stayed the same in the other three.
- Little has been done to improve our business climate. The report finds that the United States was one of only three countries in the top 10 to not implement at least one reform in the last year. Compare that to South Korea which implemented four and Georgia which implemented six.
Many of the categories cover state and local issues, but the “Paying Taxes” category is pertinent to leaders in Washington. The U.S. fell four spots to number 69 in that category. One detail in particular to notice is that the U.S. has a higher total tax rate (46.7%) than other highly-developed OECD (Organization for Economic Co-operation and Development) countries, many of whom are our biggest competitors. We also happen to have the highest corporate tax rate. Comprehensive tax reform would do wonders.
Ranking number four in the world is nothing to sneeze at. The U.S. continues to be place where business and entrepreneurship are nurtured, but there’s room for improvement. With the news that the economy grew only at a 2% rate, we know that more needs to be done to improve our business environment to encourage additional economic growth, create jobs, and improve our global competitiveness.
[H/T Anthony Kim at The Foundry.]