Most states and municipalities that lose business in spite of offering companies tax breaks walk away, but one town is fighting back. (Story in today’s NYT.) Point: In a competitive global environment, ... ...tax breaks can’t trump the adoption of competitive tax and regulation policies relative to those overseas, and as a result, states’ and cities’ “economic development bureaus” that construct tax break strategies to lure and keep business are taking a huge risk.
A much better strategy is to promote tax cuts across the board—not merely for the politically well-connected (which is a recipe for division). The long run benefits of such policies are huge, because they weaken the redistributive ethic while attracting capital and labor that would now be relatively more secure and productive.
