What is it about?
Some Federal programs provide wage credits to businesses who hire people who live and work in high poverty and unemployment neighborhoods. This study shows that these tax incentives increased business moves in, but also but also moves out with no overall change in the number of businesses.
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Why is it important?
State and Federal governments are concerned about accidentally moving a business from one high employment place at the expense of another. They should also be concerned that tax incentives might have the unintended consequence of triggering moves out.
Perspectives
When I presented this paper at a conference, a colleague asked why I would do this study, when it is well documented that spatially targeted tax incentives are bad public policy. Governments should invest in people not places. I do work on place-based initiatives because people live in places and we do not have a good set of solutions to improve the well-being of people living in places with high unemployment.
Dr Richard John Smith
Wayne State University
Read the Original
This page is a summary of: Did the Community Renewal Tax Incentives Pirate Businesses From Other Places?, Economic Development Quarterly, December 2015, SAGE Publications,
DOI: 10.1177/0891242415620008.
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