Community-Based Tax Incentives

Tax incentives are chief among the levers that government officials can pull to implement place-based economic development strategies. Tax incentives are so appealing because they have incredibly attractive political features. For one, tax incentives, such as those to retain or create new jobs, afford elected officials with at least the appearance of assertive action. Also, tax incentives do not require increasing government collection of revenue through new taxes or fees; rather, they are future tax revenue forewent. As a result, tax incentives enjoy popular support because they both give the appearance of government action and do not require sacrifices in the form of increased tax rates, user fees, and the like. Those are at least some of the benefits of tax incentives, including those designed to retain jobs for constituents in particular places