Evaluating Business Development Incentives PDF Download

Author: Kenneth E. Poole
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 158

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Author: Timothy J. Bartik
Publisher: W.E. Upjohn Institute
ISBN: 0880996684
Category : Political Science
Languages : en
Pages : 180

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Bartik provides a clear and concise overview of how state and local governments employ economic development incentives in order to lure companies to set up shop—and provide new jobs—in needy local labor markets. He shows that many such incentive offers are wasteful and he provides guidance, based on decades of research, on how to improve these programs.

Author:
Publisher:
ISBN:
Category : Labor supply
Languages : en
Pages :

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Author: Oregon. Audits Division
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 34

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Author: Christian Conroy
Publisher:
ISBN:
Category : Political planning
Languages : en
Pages : 112

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Economic development scholars remain divided over whether economic incentives designed to attract businesses to a locality ultimately promote job growth, higher wages and economic development or just give away taxpayer dollars. While some research has found that economic incentives may nudge a company to choose one location over a similar location, others have argued that companies make location decisions based on strategic considerations like human capital and supply chains, and not based on economic incentives. At the same time, even if companies are choosing to locate to a particular locality based on an economic incentive package, it is not clear that the growth they bring is enough to compensate for the loss of tax revenue. In this paper we evaluate the impact of five different types of state-level economic incentives on GDP growth. We use a novel Panel Database on Incentives and Taxes established by the W.E. Upjohn Institute for Employment Research that contains data on marginal business taxes and business incentives for 45 industries in 47 cities in 33 states collected from 1990 to 2015. Using several estimation strategies, including short and long term two-way fixed effects regression modeling and propensity score stratification, we find that economic incentives in the aggregate have a positive impact on state-industry GDP growth but the effects differ across economic incentive types.

Author: Belden Hull Daniels
Publisher:
ISBN:
Category : Industrial development bonds
Languages : en
Pages : 86

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Author: Ilene Grossman
Publisher:
ISBN:
Category : Industrial policy
Languages : en
Pages : 12

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Author: Daphne A. Kenyon
Publisher:
ISBN: 9781558442337
Category : Electronic books
Languages : en
Pages : 0

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The use of property tax incentives for business by local governments throughout the United States has escalated over the last 50 years. While there is little evidence that these tax incentives are an effective instrument to promote economic development, they cost state and local governments $5 to $10 billion each year in forgone revenue. Three major obstacles can impede the success of property tax incentives as an economic development tool. First, incentives are unlikely to have a significant impact on a firm's profitability since property taxes are a small part of the total costs for most businesses--averaging much less than 1 percent of total costs for the U.S. manufacturing sector. Second, tax breaks are sometimes given to businesses that would have chosen the same location even without the incentives. When this happens, property tax incentives merely deplete the tax base without promoting economic development. Third, widespread use of incentives within a metropolitan area reduces their effectiveness, because when firms can obtain similar tax breaks in most jurisdictions, incentives are less likely to affect business location decisions. This report reviews five types of property tax incentives and examines their characteristics, costs, and effectiveness: property tax abatement programs; tax increment finance; enterprise zones; firm-specific property tax incentives; and property tax exemptions in connection with issuance of industrial development bonds. Alternatives to tax incentives should be considered by policy makers, such as customized job training, labor market intermediaries, and business support services. State and local governments also can pursue a policy of broad-based taxes with low tax rates or adopt split-rate property taxation with lower taxes on buildings than land.State policy makers are in a good position to increase the effectiveness of property tax incentives since they control how local governments use them. For example, states can restrict the use of incentives to certain geographic areas or certain types of facilities; publish information on the use of property tax incentives; conduct studies on their effectiveness; and reduce destructive local tax competition by not reimbursing local governments for revenue they forgo when they award property tax incentives.Local government officials can make wiser use of property tax incentives for business and avoid such incentives when their costs exceed their benefits. Localities should set clear criteria for the types of projects eligible for incentives; limit tax breaks to mobile facilities that export goods or services out of the region; involve tax administrators and other stakeholders in decisions to grant incentives; cooperate on economic development with other jurisdictions in the area; and be clear from the outset that not all businesses that ask for an incentive will receive one.Despite a generally poor record in promoting economic development, property tax incentives continue to be used. The goal is laudable: attracting new businesses to a jurisdiction can increase income or employment, expand the tax base, and revitalize distressed urban areas. In a best case scenario, attracting a large facility can increase worker productivity and draw related firms to the area, creating a positive feedback loop. This report offers recommendations to improve the odds of achieving these economic development goals.

Author: National Association of State Development Agencies (U.S.)
Publisher: The Urban Insitute
ISBN: 9780877665014
Category : Business & Economics
Languages : en
Pages : 796

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Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 90

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In a follow up of the November 2006 Communication "Towards a more effective use of tax incentives in favour of R&D" (COM(2006)728), the expert group "R&D tax incentives evaluation" was established to address the need to improve the evaluation of R&D tax incentives, both at individual firm level and on the economy at large, building on identified best practices from the EU and abroad. The key issue examined was the coherence between the methodologies used for evaluating the effectiveness of R&D tax incentives in Europe as to facilitate the comparison of evaluation results and foster mutual policy learning amongst Member States. Findings are summarised in the report "Comparing practices in R&D tax incentives evaluation". In 2009, the tax expert group re-examined the current guidelines on the design and evaluation of R&D tax incentives (first developed in 2005), assessed the impact of tax incentive schemes on R&D investment location, and analysed the relationship between tax incentives schemes and R&D collaboration. The work of the group also examined the role of financing constraints on the ability of firms to undertake R&D investments. A one day workshop with national experts from Member States was held in Brussels in October 2009. This final report of the group comprises a main report and annexed papers covering: the effect of R&D tax incentives on location of R&D investment, tax incentives for industry-science collaboration, financing constraints for industrial innovation, and summaries of R&D tax incentive schemes in EU and non-EU countries. It provides important insights for ongoing policy discussions on best-practice in the design, implementation and evaluation of R&D tax incentive schemes.