Conventional economic wisdom holds that the optimal level of business taxes recovers the exact cost of providing public services to businesses. I present an alternative model and derive conditions under which a self-interested decisionmaker picks tax rates to maximize an objective function that...

The authors analyze the impact of tax increment financing (TIF) on urban industrial property values. In Chicago, it does not increase values, they find. Indeed, being located in a TIF district might lower a property's value. However, property values should not be the only measure of a TIF's...