Distinguishing Development Incentives from Developer Give-Aways: A Critical Guide for Development Practitioners and Citizens

The vast majority of communities offer financial incentives to private businesses and, among these, tax incentives remain the most widely used. Tax and other financial subsidies used to attract firms account for the bulk of public resources spent on economic development. Yet the interests of city re...

Full description

Saved in:
Bibliographic Details
Published in:Policy studies journal 1999-03, Vol.27 (1), p.147-164
Main Authors: Oden, Michael D., Mueller, Elizabeth J.
Format: Article
Language:English
Subjects:
Business costs
Community
Community development
Developers
Economic activity
Economic Development
Efficiency
Evaluation
Finance
Financial planning
Hotels & motels
Management
Mayors
Neighborhoods
Politics
Present value
Property taxes
Public Policy
Renovation & restoration
Subsidies
Tax incentives
United States
Urban development
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The vast majority of communities offer financial incentives to private businesses and, among these, tax incentives remain the most widely used. Tax and other financial subsidies used to attract firms account for the bulk of public resources spent on economic development. Yet the interests of city residents—especially those marginalized in city politics—generally are not a key consideration in the fashioning of incentives. Using a hypothetical abatement proposal, this article highlights nine key questions that must be addressed to understand the potential benefits to the community of tax incentive programs. This exercise demonstrates how proponents of incentive deals typically overvalue benefits. By asking the right questions and conducting their own analysis, citizens can arrive at a more realistic estimate of net benefits.
ISSN:0190-292X
1541-0072
DOI:10.1111/j.1541-0072.1999.tb01959.x