Sander Daniels, a co-founder at Thumbtack.com, recently sent me some information about a survey of small business owners.

Daniels notes the following as the most interesting findings.

• 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.
• An important predictor of small business friendliness was whether small business owners are aware of their state or local government offering training programs for small businesses.
• Small business owners ranked Idaho and Texas as the most business-friendly states, with Oklahoma City and Dallas-Ft. Worth taking top honors among cities across the nation. Vermont and Rhode Island found themselves on the opposite end of the spectrum, joined in the bottom-five by New York and California.

Living in the Washington, DC metro area, I decided to focus on the three local governments of VA, MD, and DC.  I took away the following observations.

• DC actually did better than I would have expected in a number of areas.  Knowing two small business owners here in the District, I know the aches and pains they have.  However, DC comes up short in what the business owners value most: ease of getting their business' started and costs of hiring.  DC scored an F in both of those, earning them an overall grade of D+.  The business owners I know tell of regulators who give conflicting information for regulatory compliance in the process of trying to get the businesses up and running; however, they have to satisfy all of them.  DC also likes to set tight parameters on who business can hire.  They like to mandate a certain percentage of DC residents as employees.  I've heard leaders call for mandating that business hire inmates coming out of prison.  While that sounds like a great thing in general, it may not sit well with a business owner.
• Every week in the newspaper, I read at least one story that illustrates how Maryland's state government seems to want to abuse their taxpayers and businesses with poorly vetted regulatory ideas and taxes.  Maryland has mediocre grades across all categories and doesn't really look attractive even in any one single way.  Speaking to topics outside of the survey, Maryland does offer lower costing real estate with proximity to federal agencies and organizations, such as those in DC itself and Johns Hopkins Applied Physics Lab.  However, those usually don't weigh into the interests of small businesses of this survey, and they tend to be very industry specific.
• Virginia really knocks it out of the park.  They score A- or better in all categories except for two, and in those they score a B and B+.  Maryland can only really claim lower cost real estate as an advantage, and that's probably a side affect of the supply and demand trends of more businesses wanting to locate in Virginia as opposed to Maryland or DC.  Also, in regards to real estate, I'm primarily considering the Northern Virginia area as opposed to the state as a whole.

Every city and state has its own data with visualization of full results.  The rankings come from information collected from small business owners, such as wedding photographers, auto mechanics, and yoga instructors.

You can read the full survey here: http://www.thumbtack.com/survey.

A reader wrote into the Washington Examiner's letters to the editor making claims that Ronald Reagan's tax policies hurt low income people during his president.  However, his attacking Reagan dismisses important data.

His figure of youths in poverty growing by 0.9 million between 1980 and 1988 is only a snapshot of a bigger picture.  Child poverty rate (18 under) stood at 12,068 in 1981 when Reagan took office and stood at 11,935 when he left.  That figure rose and subsequently fell during Reagan's two terms, likely attributable to the tax reform he enacted during his presidency.

Also, growth in top 5% income earners doesn't damage the other 95%. On the contrary, the top 5% earners' tax contributions increased, which contributed to a 28% increase in income tax revenue, adjusted for inflation.  Furthermore, total privately held wealth is not a fixed aggregate value, meaning one person getting richer does not necessarily require somebody else getting poorer.  More often, it means every other person economically separated by N-degrees can benefit as well.

Lastly, stating that the two lowest quintiles fell from 4.2% to 3.8% and 10.2% to 9.6% respectively between 1980 and 1988 dismisses the fact that total income for each rose at a rate that out-paced
inflation.  Each respectively increased by 39% and by 44%.

At first glance one could interpret Cargill's stats as evidence of Reagan tax policy hurting low income earners, but a complete picture reveals the opposite.

You can read the original letter to the editor here: http://washingtonexaminer.com/opinion/letters-editor/2012/05/letters-editor-may-2-2012/559376.