The Economic Perspective: “Can Taxes Impact Business Start-Ups?”

Mary:  This is Mary Walden with economist MW welcoming you to the economic perspective.  Today’s program asks if taxes can impact business start-ups?  Mike, there is always debate over how taxes and tax rates impact the economy.  The largest taxes we pay are to the federal government.  Does this mean state and local taxes are too small to matter to businesses and households?


Mike:  Summary Answer

  • Issue has been especially important in NC with moves by the General Assembly in recent years in order to grow the economy
  • Have a brand new study from the Fed Reserve speaking to this
  • Results show state taxes – particularly income taxes – can impact business start-ups
  • Specifically, study showed that higher state income tax rates were related to a reduction in new business start-ups
  • Makes sense – starting a business – every dollar counts
  • I’m MW


Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.