Editor's note: There are a lot of errors in the CNBC report such as stating that parts of the GE Tax were 'suspended' when in fact it was exemptions from the GE Tax which were 'suspended'.  That would make Hawaii's rankings even worse than they are.  Nonetheless it is time to extract the unchangeable facts of geography from these surveys and identify the remaining changeable policies so that Hawaii can move off the bottom of this list.

Hawaii Is the Worst State for Business in the Country

CNBC: America's 50th state is now 50th in more ways than one. Hawaii finishes dead last in America's Top States for Business 2013, down from 49th in 2012.

How badly did the Aloha State do in this year's study? It is hard to find a category where the state does not finish at or near the bottom....

With a top rate of 11 percent, Hawaii has among the highest individual income taxes in the country. It has the nation's third- highest gas tax at 67.1 cents per gallon. The top corporate income tax rate 6.4 percent is not out of line with most states, but another business tax—relatively unique to Hawaii—draws frequent criticism.

Most business activities are subject to a General Excise Tax as high as 4 percent. Four cents of every dollar in sales goes directly to the state....

The state has been moving to diversify its economy, which is heavily dependent on tourism. A generous Enterprise Zone program offers incentives—including relief from that General Excise Tax—for a wide variety of businesses, from call centers to medical research firms.

And of course, there is that legendary Quality of Life. It is not just beaches. We found Hawaii's air and water are clean, the crime rate is low, and Hawaiians are among the healthiest Americans.

Plus, there is always hope for America's Bottom States for Business.

Consider Alaska, which shares many of Hawaii's built-in disadvantages. It finished last every year from 2007 through 2010, then slowly climbed. Costs fell and the economy rose. This year, Alaska posts its best finish yet: 44th....

read ... CNBC

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