This appendix includes a detailed description and data source information for this asset class.
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Legal and Regulatory Environment
The legal and regulatory environment plays an important role in the success of innovation based economic development. The relative importance of taxes and regulations among other regional factors, such as availability of skilled workforce, is frequently overstated. Nevertheless, regional tax and regulatory burdens—real or perceived—can affect the location and resource allocation decisions of companies and should be accounted for in regional economic analysis.
Legal and Regulatory Environment Metrics
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Tax codes vary significantly across municipalities in a region. As a result, local sources are usually best suited for explaining a region’s efforts toward making its tax code supportive to business. Several sources are available for comparing tax rate data at the national level. Economy.com offers several fee-based sources for information on business costs that include state and local tax data, such as its annual North American Business Cost Review. Reports can be found on the Economy.com web site (www.economy.com). The Tax Foundation (www.taxfoundation.org) is another source for information on state tax and regulation systems. Its annual State Business Tax Climate Index provides data on individual income tax, fiscal balance, tax base conformity, sales and gross receipts tax, and corporate income tax. Data should be presented in a way that illustrates comparisons among peer regions, according to location, population, or some other criterion.
Cost of Doing Business
Cost-of-doing-business data can be found in publicly available and private sources. Several magazines, such as Forbes, publish annual rankings that compare metropolitan areas based on various cost-of-doing-business indicators (www.forbes.com/lists). Several private economic consulting firms such as Economy.com (www.economy.com) also offer cost-of-doing-business data. Economy.com’s Precis Metro Reports, for example, include a yearly measure of the cost of doing business at the MSA and state levels. The index weights factors such as tax burdens, labor costs, and energy costs.
Survey questions include:
Cost of doing business in the surveyed firm’s region (specifically, the cost of real estate, wages and salaries, and utilities)
Region’s cost of living for the surveyed firm’s employees
State and local governmental regulations and permitting procedures affecting businesses
Level of taxation affecting business (relative to other regions)
Links to Data: View suggested Legal and Regulatory Environment public sources in the table below.
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The following data sources and evaluation criteria are all related to connective organizations.
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