New Jersey has landed in a spot no state wants to brag about. According to a report discussed on Fox Business’ Varney & Co., the Cato Institute now ranks New Jersey as the least free state when it comes to regulation, putting it behind even California and New York.
That ranking was the starting point for a broader conversation led by Stuart Varney, with reporting from Madison Alworth and analysis from economist John Lonski. Together, they painted a picture of states where rules, filings, taxes, and compliance demands are not just annoying, but serious obstacles to growth.
It is the kind of ranking that stings because it confirms what many business owners already suspect. A state can have talent, money, and location on its side, but if operating there starts to feel like a paperwork marathon, people begin looking for the exit.
New Jersey Lands At The Bottom
Alworth told Varney that in an era when many people can work from almost anywhere, highly regulated states are becoming less attractive. She said the latest Cato Institute data puts New Jersey first in the wrong category, with California and New York right behind it.
At the other end of the list, she said, were Arkansas, Iowa, and South Dakota, which ranked as the states with the fewest regulations.
That contrast is hard to ignore. Some states are making it easier to start, run, and expand a business. Others, at least according to this ranking, are making the process heavier and more expensive.
The phrase “least free state” is obviously designed to grab attention, but it also works because it condenses a larger complaint into a few blunt words. For many owners and workers, regulation does not feel abstract. It feels like delay, cost, and one more form due by Friday.
Why One Business Owner Finally Left
To show what that burden looks like in real life, Alworth highlighted the story of Dhara Patel, CEO of Outer Realms, a VR real estate touring company that had been based in New York City.
Patel said the amount of regulation she had to manage became exhausting. In the clip aired by Fox Business, she described lying awake at night wondering whether she had filed the right paperwork or missed a new requirement.
She said the constant compliance demands became unbearable, especially as new reports and annual filings kept piling up. That kind of comment sticks because it sounds less like ideology and more like burnout.
Alworth reported that Patel eventually moved her business to Florida last year. But even leaving was not simple.
According to Patel, moving the LLC out of New York was itself tangled up in more filings, reports, and paperwork. She said that in many other states, the process is clean and straightforward enough that someone can figure it out with a simple online search. In New York, she said, it became much more complicated.
Patel also said she wishes she had left sooner because it would have saved her more money. That is the kind of line lawmakers should probably take seriously, because it is not just frustration talking. It is a business owner saying the state’s system cost her time and cash she cannot get back.
Taxes And Regulation Often Travel Together
Alworth added that taxes were also a major reason Patel moved. By leaving New York, Patel said she saved about 15% because she no longer had to pay either a state tax or a city tax.
She told Fox Business that the money now goes back into marketing and the business itself.
That is a revealing detail because it shows how regulation and taxation often hit at the same time. One takes money directly. The other drains time, focus, and labor. Together, they can make a business feel like it is spending more energy surviving the system than serving customers.
Varney reacted by calling it a good story, and from a business perspective it is easy to see why. It is a simple example of a broader trend: when a company leaves a high-cost state and feels immediate relief, that is a warning sign for the place it left behind.
The Trump Administration’s Deregulation Pitch
Alworth also used the segment to point to the Trump administration’s broader deregulatory message. She said the administration finalized 1,460 regulatory actions in fiscal year 2025, which the White House says produced $211.8 billion in net cost savings.
According to her report, that worked out to more than $600 per American.
One example she cited was the FDA’s rollback of a Biden-era regulation on medical devices and lab tests. Alworth said the White House claimed that move alone saved $20.3 billion, while also helping reduce costs and open room for more innovation.
Whether every projected savings number holds up over time is always worth debating, but the political argument is easy to understand. If regulation raises costs and slows down investment, then removing some of it becomes an economic growth tool in its own right.
That is especially persuasive in a climate where businesses already feel squeezed by labor costs, financing costs, and uncertain consumer demand. A lighter rulebook can start to look like one of the few ways to give them room to breathe.
John Lonski Calls Regulation A Hidden Tax
When Varney turned to economist John Lonski, the question was simple: do states with a high regulatory burden tend to have the slowest economic growth?
Lonski’s answer was just as direct. Yes, he said, “no question about it.”
He described regulation as being like a tax, a cost businesses have to absorb simply to operate in a state. In his view, managers in heavily regulated environments have less time to spend growing the business because more of their energy goes into compliance.
That, he said, naturally leads to slower growth.
Lonski also pointed out a second problem that does not always get enough attention. Regulations do not just create work for private businesses. They also create work for the government.
He said states need more staff and more regulators to oversee heavily regulated companies, which means more public spending as well. In other words, the private sector pays to comply, and the state pays to maintain the machinery that enforces the compliance.
That is a strong point because it shows how the burden can hit both sides of the ledger. Businesses face higher operating friction, while governments build larger systems to manage that friction.
Why This Ranking Could Matter More Than It Sounds
Varney summed up the frustration in his own way, saying some officials just cannot resist regulation and seem determined to rein in capitalism. It was a sharp line, but it fit the tone of the segment.
The bigger takeaway from the discussion is that these rankings are not just about political branding. They matter because they shape decisions about where people build companies, hire workers, and invest money.
When New Jersey gets labeled the least free state on regulation, that is not merely an insult tossed around on cable TV. It is the kind of label that can follow a state into boardrooms, startup decisions, and relocation plans.
And once that reputation hardens, it gets expensive to reverse. Businesses can tolerate a lot, but endless compliance, high taxes, and slow growth are a hard combination to sell, especially when other states are offering a much easier path.
Raised in a small Arizona town, Kevin grew up surrounded by rugged desert landscapes and a family of hunters. His background in competitive shooting and firearms training has made him an authority on self-defense and gun safety. A certified firearms instructor, Kevin teaches others how to properly handle and maintain their weapons, whether for hunting, home defense, or survival situations. His writing focuses on responsible gun ownership, marksmanship, and the role of firearms in personal preparedness.
