Connecting today’s news with the research and opinion you need from TPPF experts.

Worth It?

What to Know: With Amazon backing out of its decision to locate a new headquarters in New York—which had offered the company $3 billion in economic incentives—questions remain about whether such incentives and similar economic development deals make sense.

“The research supports those who question the wisdom of cities and states incentivizing economic development. Studies suggest the jobs and economic gains are usually not worth the tax breaks since the majority of companies would have come even without incentives,” writes UT Austin’s Nathan Jensen and Calvin Thrall in The Conversation. “And that’s when the companies try to live up to the promises they made. They don’t always do so, with the latest example being Foxconn’s announcement that it is reconsidering plans to build a factory in Wisconsin – less than a year after agreeing to create up to 13,000 high-tech jobs in exchange for more than $4.5 billion in incentives.”

The TPPF Take: Economic incentives at taxpayer expense are bad public policy.

“Tax abatement deals are usually offered as a way to encourage economic development,” says TPPF’s James Quintero. “But in practice, they’re unfair and ineffective. It’s not the job of government to give special treatment to some businesses and not others, no matter what political benefits they might achieve for politicians.”

For more on economic incentives, click here.