Attracting Jobs

Do tax breaks for business spur employment?


Tax-supported subsidies aimed at luring companies to relocate or retain offices and factories in specific locations have proliferated. Local and state governments, engaged in fierce competition for jobs, are giving businesses up to $70 billion annually in tax breaks, new roads and training facilities and other incentives. Economic-development officials and companies that have relocated for subsidies say the incentives have spurred employment growth and helped some businesses stay profitable. But critics, who include many economists, argue that the incentives generate relatively few new jobs and instead lead many companies merely to shift operations from one place to another, depending on where they can broker the best deal. Among the most controversial subsidies are those supporting professional-sports stadiums. Supporters say new sports facilities help cities raise ...

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