The corporate tax breaks you tend to hear about are the outliers: Tesla's $1.3 billion from Nevada, Boeing's $8.7 billion from Washington state, Mike Pence's deal to keep some Carrier jobs in Indiana.
The report, based on a database of 26 years of incentives in 33 states, affirms the consensus that these tax breaks—which have tripled since 1990, when the database begins keeping track—don't do much to convince companies to move. Plotting the effects of incentives and taxes on state GDP growth, the study concludes their effects are "always statistically insignificant ... the maximum possible effects of incentives on increasing growth ... are towards the lower end of the range of estimates in the previous literature." (And the literature, as Richard Florida reminds us at City Lab, does not smile on incentives.) And that null hypothesis seems to hold true even within the industries where the incentives were applied.....Less flashy but more important, a February report from the Upjohn Institute for Employment Research suggests, are the run-of-the-mill economic development incentives built into state law across the country and designed either to attract companies, to keep them in place, or to get them to add positions. In 2015, incentives for new or expanding export-based industries (i.e., manufacturing, tech, media, any company that sells its goods or services beyond the local economy) offset average state and local business taxes by 30 percent, costing the U.S. $45 billion.
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