http://www.capitalnewyork.com/sites/default/files/131115__Incentive_Study_Final_0.pdf
NEW YORK STATE BUSINESS TAX CREDITS:
ANALYSIS AND EVALUATION
A Report Prepared for the
New York State Tax Reform and Fairness Commission
H. Carl McCall and Peter J. Solomon, Co-Chairpersons
Marilyn M. Rubin
and
Donald J. Boyd
Made possible by support from Peter G. Peterson and the Peter J. Solomon Family Foundation
November 2013
......
Economic development officials value business tax incentives as tools needed to compete
with other states. There is, however, no conclusive evidence from research studies conducted
since the mid-1950s to show that business tax incentives have an impact on net economic gains
to the states above and beyond the level that would have been attained absent the incentives. In
addition, business tax incentives violate principles of good tax policy and tenets of good
budgeting
....
Pros and Cons of Business Tax Incentives: What the Research Tells Us
New York is not unique in its use of tax incentives to promote economic development.
All 50 states offer at least one tax incentive to businesses; most offer several, primarily to attract
businesses from other states. As stated in a recent report by the Pew Center on the States,
business tax incentives are often used “…as part of a bidding war between states over firms
seeking to relocate or expand. If one state offers a tax credit, others often feel compelled to
match it or risk being left behind.”13 This is especially true when states react to claims by
businesses that taxes are a major factor in their location and expansion decisions. As mentioned
earlier, there is no conclusive evidence from research studies conducted since the mid-1950s to
show that business tax incentives create net economic gains to the states above and beyond what
would have been attained in the absence of the incentives. Nor is there conclusive evidence from
the research that state and local taxes, in general, have an impact on business location and
expansion decisions.
In addition, almost by definition, business tax incentives violate widely accepted
principles of good tax policy: economic neutrality, equity, adequacy, simplicity, transparency,
and competitiveness.
Evidence Counts: Evaluating State Tax Incentives for Jobs and Growth (Washington, DC: Pew Center on the States, April
2012,
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Economic_Mobility/Pew-Evaluating-State-Tax-Incentives-Report.pdf
Tuesday, December 10, 2013
Metroplex's promises broken, again
"Schenectady City and County IDAs were a combined 4,034 jobs below their job creation promises, despite providing over $4 million in net tax exemptions in 2011 alone. "
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