05 Apr Several of the assigned short articles on economic development in the syllabus discuss recent state efforts to lure businesses with tax breaks and other incentives. ?Discuss some of
1. Several of the assigned short articles on economic development in the syllabus discuss recent state efforts to lure businesses with tax breaks and other incentives. Discuss some of these. Does research by Lynch, Bartik and others suggest Incentives can be cost-effective means of promoting growth and job creation? What do meta-studies find about whether tax cuts spur state and local economic development? Bartik estimates that over the long term, state spending on economic development incentives returns $0.5 on every $1 in state spending/lost revenue. What are better uses of state funds with much higher returns per $1 spent?
2. To make their tax systems more progressive, a number of states have proposed raising income tax rates on high earners. Critics of these proposals argue that this will drive high earners to move to low tax states. Based on the readings by Cristobal Young and by Robert Tannenwald (on blackboard), what does the data and evidence show? Do high earners move to avoid taxes? Be detailed and cite relevant data.
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