New Report Debunks Key Conservative Argument For Corporate Tax Breaks

[eridani]

http://thinkprogress.org/economy/2016/02/04/3746370/tax-incentives-states-startups/

But how much good do such interstate relocations really do to the job markets of the state that wins the race to the bottom on corporate taxes?

Barely 13 percent of all net job creation in any given state in any given year comes from out-of-state businesses either relocating from one state to another or expanding into new states, research from the Center on Budget and Policy Priorities shows. Pure relocations such as the GE move “typically represent only 1 to 4 percent of total job creation each year, depending on the state,” economists Michael Mazerov and Michael Leachman write in the report. The overwhelming majority come from home-grown firms rather than those lured across a border.

“We’re not saying they should ignore [out-of-state firms looking to move], but there’s not a lot they can do to influence it,” Mazerov said in an interview. “They should focus on entrepreneurship and they should focus on helping their existing in-state firms to survive and grow. It’s a matter of priorities not a matter of ignoring [out-of-state companies].”

Even policies that seem like across-the-board stimulus to the business community rather than sweetheart deals with particular CEOs are often ill-suited to the startups and fast-growing young firms that actually drive state job markets, the economists note. Lowering income tax rates doesn’t do much for infant businesses that have very little taxable income in the key early years of their lifecycle.

Because of balanced budget requirements in most states, those governments are even more constrained than their federal cousins in how they allocate scarce budget resources. So when a legislature opts for giveaways to lure flashy brands to relocate or expand, they forgo other policies that would benefit the home-grown firms that generate nearly all job growth.

[Jenny_92808]

1. Conservative say that giving corporations and the rich more money

creates more jobs and that is a lie. Demand, is what creates more jobs and that means that good pay for jobs is what creates more jobs, because it gives people more money to spend. The rich hoard their money in offshore accounts and that does not create demand, which creates jobs. The right-wing lie saying otherwise is an obvious attempt to deceive the people. It is very unfortunate for the people that the RW propaganda machine has tricked so many people into voting against their best interests.

[eridani]

2. Higher pay also means less public assistance is necessary. n/t

[pampango]

3. Corporations playing one city/state off against another for tax breaks and other incentives

should not be allowed since there is no net gain for the 99%. Similarly corporations playing one country off against another for tax breaks and other incentives should be banned.

We need multi-state efforts (national legislation) to make this happen. Otherwise, corporations will continue to play one state off against another. This does not happen in progressive countries.

Similarly we need multi-national (international) agreements to prevent this from happening between countries. Neither, unfortunately, is likely to happen given corporate influence.