Best and Worst States for Small Business

Fourth-worst: Vermont

Top personal income tax rate: No. 46 at 8.95%
Top individual capital gains rate: No. 47 at 8.95%
Top corporate income tax rate: No. 36 (tie) at 8.5%
Top corporate capital gains rate: No. 37 (tie) at 9%
Gas tax: 26.6 cents
Wireless tax: 8.6 cents
Internet access tax: No

Very high income and capital gains taxes plague Vermont's business climate.

The state also imposes a death tax, has high workers comp costs, a high level of state and local spending and a high five-year rate of increase in state and local government spending.

On a positive note, the state does have very low crime, a high state minimum wage and no individual or corporate AMT. Its share of federal funds as a share of its total revenue is slightly above average, while its state and local debt is below average.

Last year, Vermont Lt. Gov. Phil Scott implemented a "Vermont Everyday Jobs" initiative to promote Vermont small businesses as well as strengthen the relationship between the business community and state government.

The program seeks to "find out in a hands-on manner what it takes to make Vermont businesses work," so that the governor can "gain a better understanding of what state government can do to help those businesses work better."

This week Scott visited with the family-owned and run Smugglers' Notch Distillery in Jeffersonville, where he was taken through the bottling and packaging process, "starting by setting up the still for a gin run, washing and labeling the bottles, signing tax stamps, filling bottles, and packing up cartons," according to a release on Wednesday.