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State's business owners generate mixed results

March 20, 2007

Plenty of conflicting trends are apparent when examining success of the state’s business owners, according to Morton Marcus, emeritus director of the Indiana Business Research Center at Indiana University.

A lack of data makes detailed comparisons all but impossible, Marcus wrote in a column that is distributed to Indiana newspapers, including IBJ.

Still, he said information gleaned by the U.S. Bureau of Economic Analysis from tax forms shows:

-Indiana proprietors seem active when considering they accounted for 15.3 percent of the state’s work force in 2005, the latest year the data is available. That was up from 12.5 percent in 1990. However, despite the gain, the proportion rose faster at the national level, dropping Indiana’s rank in share of proprietors to 47th from 40th.

-Hoosier proprietors saw their earnings advance faster than peers nationally: up 72 percent compared to 69 percent. Indiana proprietors soared above the below-average increase of 65 percent in wages and salaries earned by other Indiana workers.

Marcus said it is difficult to tell by the figures alone if Hoosiers are more or less entrepreneurial than elsewhere.

The state’s tax code might discourage starting businesses, he said. Opportunities might not be as common in Indiana.

Yet another possibility, he added, is that fewer Indiana people create a business in order to dodge taxes—doing a few weekend plumbing jobs to write off a pickup truck, or charging off a home office and its computer equipment even when children are its main users, for example.

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