North Dakota is doing all the little things to help it manage its natural resources effectively, like keeping taxes low and being a right-to-work state. As Joel Kotkin writes in his Wall Street Journal editorial:
Already fourth in oil production behind Texas, Alaska and California, the state is positioned to advance on its competitors. Drilling in both Alaska and the Gulf, for example, is currently being restrained by Washington-imposed regulations. And progressives in California—which sits on its own prodigious oil supplies—abhor drilling, promising green jobs while suffering double-digit unemployment, higher utility rates and the prospect of mind-numbing new regulations that are designed to combat global warming and are all but certain to depress future growth. In North Dakota, by contrast, even the state’s Democrats—such as Sen. Kent Conrad and former Sen. Byron Dorgan—tend to be pro-oil. The industry services the old-fashioned liberal goal of making middle-class constituents wealthier.
Rhode Island, in contrast, is a state that is doing all the little things wrong. Rhode Island has one of the highest tax rates and unemployment rates in the country, and it’s a non-right-to-work state. Rhode Island should be a much more vibrant state, with its miles of beautiful coastline, easy access to Boston, Massachusetts and New York, New York (by train even!) and loads of highly educated college grads. Yet newly elected governor Lincoln Chaffee is going in the opposite direction from North Dakota. His new tax bill will apply a 6% tax and a 1% tax to the following items, as listed in The Providence Journal:
6 percent tax would apply to . . .
Goods currently exempt
- Computer software, prewritten and delivered electronically
- Eyeglasses and contact lenses
- Insurance proceeds from destroyed or stolen passenger automobile as trade-in allowance
- Purchase of newspapers
- Nonprescription drugs, including medical marijuana
- Property or supplies used in the processing or preparation of floral products
Services currently exempt
- Business-support services
- Couriers and messengers
- Data processing, hosting and related services
- Domestic services, extermination and pest-control, landscaping and other support services by commercial providers
- Employment-agency services
- Facilities-support services
- Garbage and trash collection, including some waste-management and remediation services
- Investigation and security services, including locksmiths
- Laundry and dry-cleaning
- Moving and storage, warehousing and freight services
- Personal-care services including hairdressing salons and personal-grooming establishments, diet and weight-loss centers
- Pet services except veterinary care and lab work
- Photographic and portrait services
- Scenic and sightseeing transportation and package tours
- Taxicabs and other road-transportation services
Recreation and entertainment
- Amusement parks, campgrounds and related services, including fitness and recreational sports centers but excluding sales by elementary and secondary schools, tuitions and fees paid to fine-arts schools and promoters of performing arts, sports and similar events
- Live entertainment, excluding sports and promoters of performing arts, sports and similar events and independent performers
- Membership clubs and participant-sports centers
- Motion-picture theaters, including those of post-secondary educational institutions
- Museums, historical sites, zoos, parks, art galleries and libraries
- Spectator sports except elementary and secondary schools and promoters of performing arts, sports and similar events
Maintenance and repair labor
- Audio-visual, photographic and information-processing equipment
- Automotive, including car washes
- Clothing and footwear repair, rental and alterations
- Commercial and industrial equipment
- Electronic and precision equipment
- Furniture, furnishings and floor coverings
- Household appliances
- Recreational and sports equipment except for boats
- Watch, clock, jewelry repair
Dues
- Professional-association dues except for: alumni associations, parent-teacher organizations, booster clubs, scouting organizations, veterans organizations, political organizations, athletic associations, regulatory or administrative associations, property owners’ associations, condominium and homeowners’ associations, tenant associations and cooperative owners’ associations
1 percent tax on . . . (all currently exempt)
- Air and water pollution-control facilities
- Aircraft, including aircraft rental and leasing without pilots, and aircraft parts
- Banks and regulated investment companies’ interstate toll-free calls
- Boats or vessels brought in exclusively for winter storage, maintenance, repair or sale
- Boat or vessel sales generally
- Boat sales to out-of-state residents
- Boat manufacturers’ promotional and product literature
- Building materials used to rebuild after a disaster
- Casual sales
- Clothing and footwear
- Coffins, caskets and burial garments
- Coins
- Commercial fishing vessels in excess of 5 net tons
- Commercial vessels of more than 50 tons burden
- Compressed air
- Containers
- Dietary supplements
- Educational institutions’ rental charges
- Electricity, steam and thermal energy from the Rhode Island Economic Development Corporation
- Farm equipment
- Farm structure construction materials
- Flags
- Heating fuel used residentially
- Horse food products
- Jewelry-display products
- Livestock, poultry and other agricultural products
- Manufacturers’ machinery and equipment, and purchases used for manufacturing
- Precious metal bullion
- Renewable-energy products
- Research and development equipment
- Rhode Island Economic Development Corporation project status designees
- Rhode Island Industrial Facilities Corporation lessees
- Sales by writers, composers and artists
- Sales in municipal economic-development zones
- Sales to charitable, educational or religious organizations
- Sales of trailers ordinarily used for residential purposes
- Supplies used in on-site hazardous waste recycling, reuse or treatment
- Textbooks
- Total loss or destruction of a motor vehicle within 120 days of tax payment
- Trade-in value of boats and private passenger automobiles
- Transfers or sales made to immediate family members
- Transfers or sales related to a business dissolution or partial liquidation
- Water for residential use
You tell me which state is going to attract more business.