Regulation Matters More than Taxes, According to Study By David Henderson

Small businesses care almost twice as much about licensing regulations as they do about tax rates when rating the business-friendliness of their state or local government.

The power to tax is the power to destroy. That seems obvious. What may be less obvious is that the power to regulate is the power to destroy. When a government imposes a regulation that a business has to comply with before operating, that is like a very stiff tax.

Thus the quote above from a study by Thumbtack.com in partnership with the Kauffman Foundation. It’s based on a survey of over 6,000 small businesses. If you go here, you can click around and see how various states rank. California is in the toilet on many of the criteria. When I talk to small businessmen in California, they often complain about incredibly costly regulation.

What should worry a lot of California politicians (but may not if there’s a California Curley effect) is that right next door to California is Nevada, which ranks much higher on many dimensions.

Here’s a little poem for Nevadans speaking to Californians (with apologies to Emma Lazarus):

Give me your businesses who are tired of regulation,

Your oppressed companies yearning to breathe free,

Send these footloose tempest-tost to me,

I lift my lamp beside Reno and Las Vegas.