Worst 10 States for Franchise Growth in 2024: Insights from the ALEC-Laffer Report

The 2024 ALEC-Laffer state economic competitiveness index highlights both the best and worst environments for business growth across the U.S. While some states are thriving with favorable tax systems and other business-friendly policies, others struggle due to high taxes, high costs of doing business and other economic barriers.

Entrepreneurs looking to expand should pay close attention to the factors that will impact them as they grow. Things like steep corporate tax rates and stagnant employment growth can make expansion more difficult, and these factors are among some of the key reasons these 10 states sunk to the bottom of this year’s ALEC-Laffer ranking.

Hawaii

Economic Outlook: 41

Economic Performance: 46

Key Contributors:

• Sales Tax Burden per $1,000 of Personal Income $42.03 (Rank 49)
• Personal Income Tax Progressivity: $13.54 (Rank 39)
• Average Workers’ Compensation Costs per $100 of Payroll: $2.27 (Rank 49)

Oregon

Economic Outlook: 42

Economic Performance: 13

Key Contributors:

• Top Marginal Personal Income Tax Rate: 14.69% (Rank 49)
• Top Marginal Corporate Income Tax Rate: 15.70% (Rank 49)
• Remaining Tax Burden per $1,000 of Personal Income: $28.57 (Rank 49)

Maryland

Economic Outlook: 43

Economic Performance: 45

Key Contributors:

• Estate/Inheritance Tax Levied? Yes (Rank 50)
• State Minimum Wage: $15.00 (Rank 44)
• Top Marginal Personal Income Tax Rate: 8.95% (Rank 43)

Minnesota

Economic Outlook: 44

Economic Performance: 27

Key Contributors:

• Top Marginal Corporate Income Tax Rate: 9.8% (Rank 46)
• Personal Income Tax Progressivity: $21.69 (Rank 43)
• Remaining Tax Burden per $1,000 of Personal Income: $19.49 (Rank 38)

Maine

Economic Outlook: 45

Economic Performance: 18

Key Contributors:

• Personal Income Tax Progressivity: $28.08 (Rank 47)
• Top Marginal Personal Income Tax Rate: 7.15% (Rank 39)
• Property Tax Burden per $1,000 of Personal Income: $50.10 (Rank 49)

New Jersey

Economic Outlook: 46

Economic Performance: 34

Key Contributors:

• Property Tax Burden per $1,000 of Personal Income: $47.72 (Rank 48)
• State Minimum Wage: $15.13 (Rank 47)
• Right to Work State? No (Rank 50)

California

Economic Outlook: 47

Economic Performance: 21

Key Contributors:

• Personal Income Tax Progressivity: $42.24 (Rank 50)
• Top Marginal Personal Income Tax Rate: 14.4% (Rank 48)
• Recently Legislated Tax Changes: $0.03 (Rank 48)

Illinois

Economic Outlook: 48

Economic Performance: 43

Key Contributors:

• Top Marginal Corporate Income Tax Rate: 9.5% (Rank 45)
• Debt Service as a Share of Tax Revenue: 8.48% (Rank 47)
• State Liability System Survey: 59.6 (Rank 50)

Vermont

Economic Outlook: 49

Economic Performance: 39

Key Contributors:

• Property Tax Burden per $1,000 of Personal Income: $50.10 (Rank 50)
• Top Marginal Corporate Income Tax Rate: 8.5% (Rank 40)
• Average Workers’ Compensation Costs per $100 of Payroll: $1.98 (Rank 45)

New York

Economic Outlook: 50

Economic Performance: 29

Key Contributors:

• Top Marginal Corporate Income Tax Rate: 18.28% (Rank 50)
• Top Marginal Personal Income Tax Rate: 14.78% (Rank 50)
• Property Tax Burden per $1,000 of Personal Income: $45.15 (Rank 46)

For more on the ALEC-Laffer report, visit https://www.richstatespoorstates.org/. Find more information on top franchise opportunities at https://1851franchise.com/growth-club.