Illinois near the bottom for entrepreneurship and growth
High taxes and burdensome regulation are major factors in the state’s low ranking.
High taxes and burdensome regulation play big roles in Illinois ranking 45th in the country for entrepreneurship and economic growth in recent research.
That low score was key in the state ranking worst in the Midwest for social mobility, according to the research, from think tank Archbridge Institute, which says its mission “is to lift barriers to human flourishing.”
Five primary factors determined the rankings for entrepreneurship and growth: taxes, regulations, “business dynamism,” housing and energy.
In addition to the overall number, the institute assigns rankings for key categories. Illinois ranked in the bottom half on each key metric.
The state ranks 44th for its tax environment. High taxes hurt economic growth and social mobility.
Illinois has the third-highest corporate tax rate in the country, a particularly problematic factor. Corporate taxes are the most harmful for economic growth, according to research from the Organization for Economic Co-operation and Development. It’s imperative that Illinois reduce that rate to ensure fiscal stability and economic growth.
The state’s regulatory environment is among the country’s most burdensome for people and businesses, ranking 41st. As of 2023, Illinois had over 282,000 instances of “restrictive” language in its legal code, fourth-highest among states. “Restrictive language” includes legal requirements like “shall” or “may not.”
Illinois’ “business dynamism” ranks 35th. The biggest factors dragging down Illinois on this metric are high outmigration, a low rate of startups and lackluster company growth. Outmigration from the state has been persistent, including a net loss of over 40,000 residents from July 2024 to July 2025.
The state ranks 34th for housing affordability, and building restrictions are a primary cause of that problem. The state issues the country’s third-fewest housing permits per 1,000 people. Illinois needs to make homebuilding easier.
In energy costs, Illinois is in the middle of the country, ranking 26th. One way the state can improve on this metric is expanding nuclear energy, where Illinois is already a leader. Since Illinois lifted the ban on new nuclear facilities in January, this pathway to energy abundance is open.
To expand opportunity by facilitating entrepreneurship and economic growth, Illinois should consider a range of reforms, including:
- Reducing harmful taxes, especially the high corporate tax rate.
- Right-sizing the number of regulations, such as sunsetting now-unnecessary occupational licensing.
- Improving business dynamism by removing barriers to business growth and creating the economic conditions in which people can thrive, reducing move-outs from the state.
- Making it easier to build homes, through such means as adopting by-right zoning and streamlining permitting.
- Making more efficient the approval processes for building nuclear energy plants to expand the availability of that energy option.