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unhappycamper

(60,364 posts)
Fri Dec 27, 2013, 09:49 AM Dec 2013

Big tax breaks might not be important for states luring jobs

http://www.thenewstribune.com/2013/12/27/2966274/big-tax-breaks-might-not-be-important.html

Big tax breaks might not be important for states luring jobs
By JIM TANKERSLEY
The Washington Post
December 27, 2013

Sometime early next year, Boeing will select the location for a new manufacturing plant to build its 777X airliner, gifting what it promises will be thousands of good-paying jobs to the winner.

Those jobs are shaping up to be one of the most sought-after economic development prizes of 2014. Every state that covets them is, at Boeing’s urging, preparing a package of tax breaks and other government incentives, reaching into the billions of dollars. It’s the latest example of a decade-long trend: As good jobs have become harder to find, states have approved bigger economic handouts to attract or keep individual companies.

New economic research suggests that’s often not a good idea, and it implies that states could be bidding too much to attract the Boeing plant.

Two economists — Owen Zidar, a doctoral candidate at the University of California at Berkeley, and Juan Carlos Suarez Serrato, a postdoctoral fellow at Stanford University — write in a forthcoming paper that companies aren’t nearly as mobile as economists have long assumed. Cutting taxes, they conclude, might not be the best way to boost firms’ bottom lines and keep them around.
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