I would rather start up in a nice city andy worry about taxes once I'm making 2M a year in profits than risking to live somewhere less enjoyable without knowing if I will ever have to pay taxes anyway.
In fact, the point of my comment is that the business could be located in a low tax jurisdiction, resulting in more funds flowing to the bottom line, while the owners and employees could be located somewhere they like, even a high tax jurisdiction if they wanted.
I'm bootstrapping in NYC, for which there are a multitude of taxes and other costs:
- Rent is insane, of course :)
- LLC Newspaper Publication requirement (why this exists is beyond me)
- Large sales taxes (although ST 121.3 ensures you are tax exempt on hardware)