Business-targeted tax cuts do not improve state economies

FROM a London School of Economics and Political Science paper by Soledad Artiz Prillaman and Kenneth J Meier (my emphasis):

Studying the 50 U.S. states over the past four decades, we find that tax incentives to businesses prove unhelpful in stimulating economic growth and may even be harmful to state economies. Over the past 30 years, state policy has had little impact in determining state economic growth and that state politicians have little control over income growth and employment.

. . .

Instead, the education level of the workforce, the price of land and energy, the ideology of the government, and the level of public services all enter into the location decisions of businesses.

As I’ve noted, the efficacy of tax incentives as the basis of economic development is at best questionable.

John Haskell

About John Haskell

John graduated from the University of Southern Maine with a degree in Political Science, and from the University of Maine School of Law. He has worked in both the public and private sectors, and currently, works with a small business services company in the Mid-Coast area.