Small town business

Shoppers visit a store along a main business district.

(The Center Square) – Wisconsin is ranked toward the bottom in a new business climate survey, and the state’s largest business group is not surprised.

WalletHub is out with its new Best and Worst State to Start a Business list. Wisconsin ranks 37th.

Scott Manley with Wisconsin Manufacturers & Commerce says you can blame that primarily on Wisconsin’s personal income tax.

“Most businesses that start up are small businesses. Nobody starts a business with 1,000 employees, large businesses grow from small businesses,” Manley told The Center Square. “If you’re a small business you don’t pay the corporate income tax, you pay the personal income tax. And we have the 10th highest personal income tax rate in the United States of America.”

Manley said the WalletHub list comes at a key time in Wisconsin’s debate over the income tax.

Republicans want to lower the state’s tax to a flat 3.25% by 2026. That would give Wisconsin the lowest personal income tax among all of our neighbors.

“People vote with their feet economically,” Manley said. “If you look at the states that have been tremendously successful at attracting new people to their state, it’s states like Florida and Texas that don’t have an income tax. Or states with very low flat taxes.”

WalletHub gives Wisconsin its lowest rank for business climate. But Wisconsin also scores in the bottom half of states for access to resources.

Manley said Wisconsin’s worker shortage is once again hurting the state.

“So many businesses in this state don’t start up because they can’t find workers,” Manley added. “Businesses that are already started can’t find workers.

While WalletHub ranks Wisconsin 37th on its list, they rank Michigan 21st, Illinois 26th, Iowa 27th, and Minnesota 38th.

Utah, Florida, and Texas are the top three states to start a new business according to the WalletHub list. While West Virginia, Connecticut, and Alaska are the bottom three states.

Manley said aside from lowering taxes, Wisconsin could easily market itself better and try and grab new workers and new businesses out of places like Illinois.

“The problem is, if the people of Illinois don’t know what Wisconsin has to offer, they are not going to move here,” Manley said. “And if we continue to keep it the ‘best kept secret,’ they’re not going to move here.

You can see the entire WalletHub list here.