Mississippi led the nation in new-business applications in the 12 months starting in January 2020, according to data gathered from the U.S. Census Bureau.
The Magnolia State's increase of more than 6,000 applications was 164 percent year over year, according to a report by Visual Capitalist.
In total, there were 492,133 new business applications in January 2021—an increase of over 73 percent year-over-year.
The region with the highest growth rate was the South at 84 percent, with more than 220,000 new business applications in the region as of January of this year.
“People have become wildly innovative during Covid-19, partly because they were forced to do so due to job or income loss. Economists call this ‘creative destruction,’ wherein new innovation springs up because of the failure of particular industries or businesses,” Visual Capitalist said in its report.
“The U.S. Chamber of Commerce recommends business ideas that are ‘pandemic-friendly.’” Among many virtually-based ideas, the list includes:
- Digital marketing
- App development
- Fitness and wellness services
- Box subscription services
“As business applications are on the rise, more jobs could be created in the U.S., and competition will likely increase as well. While starting a business during Covid-19 is risky, it could have immense payoffs for the individuals involved and the overall economy,” said Visual Capitalist.
A policy change in Mississippi could combine well with the state's new-business applications trend.
Speaker of the Mississippi House of Representatives Philip Gunn on Monday endorsed the lifting of the personal income tax for most residents of the state.
Gunn’s proposal would mean the first $47,700 earned is tax exempt. For married couples, the threshold would rise to $95,400.
“Instead of asking if we can afford to end the income tax, we ought to ask if we can afford not to,” said Douglas Carswell, president of the Mississippi Center for Public Policy, a conservative think tank. “Fast growing southern states like Texas, Tennessee, and Florida don’t have income tax. That’s why incomes in those states are rising and job creation is flourishing. Mississippi could do the same, too.”
National Federation of Independent Businesses State Director Dawn Starns McVea said in response to Gunn's statement, which falls in line with that proposal made by Gov. Tate Reeves:
“Our members are behind this 100%. Most small businesses are organized as pass-through entities, meaning they pay taxes at the individual rate rather than the corporate rate. Eliminating the personal income tax would provide much-needed financial relief to small business owners struggling to recover from the economic crisis created by the Covid-19 pandemic.”
Skeptics contend that the rate will hobble the state's educational system and roads and bridges.
The income tax is “progressive,” in that it increases with the individual's ability to pay.
Backers respond that the policy change would give the economy a shot in the arm.