How do state taxes effect entrepreneurship?

A report by the SBA Office of Advocacy looks at state taxes and the effect on entrepreneurship (measure as the number of sole proprietors). While much of their analysis is hard to digest (I was more interested in learning that 14% of all PA jobs are in sole proprietor firms than in any of their analysis of the tax effect), the bottom line is:

"Rather than attempt to target tax breaks to small businesses, states should focus on traditional tax reforms involving lower tax rates, broader tax bases, and simpler tax systems that will create a more productive tax environment for small businesses, large businesses, and individuals alike."