Are Targeted Business Subsidies Good For Economic Growth?

Can Arkansas’s public officials stimulate the economy with targeted business subsidies? ACRE policy analyst Jacob Bundrick and scholar Dr. Thomas Snyder investigate this question in a working paper titled “Do Business Subsidies Lead to Increased Economic Activity? Evidence from Arkansas’s Quick Action Closing Fund.” The study, released by the Mercatus Center at George Mason University […]

How Governments Use Financial Incentives to Try to Steer the Economy

By Mr. Jacob Bundrick Earlier this month, software engineering firm Elyxor pledged to create 45 new tech jobs in North Little Rock over the next five years. Arkansas Online quoted Governor Asa Hutchinson as saying, “While we have a diversified economy in Arkansas … we will not be complete as a state and complete as […]

How Tax Breaks and Subsidies Cost You and the Government Money

By Mr. Jacob Bundrick Proponents of financial incentives for business argue that tax breaks and subsidies don’t create costs to the state’s budget. Advocates reason that if Arkansas forgoes taxing a firm in some way, and that firm truly would not have located in the state without the tax break, there is no cost to […]

Why Financial Incentives Do Not Increase Economic Activity

By Mr. Jacob Bundrick In my last post, I went over the basics of why tax incentives and subsidies are considered staples of economic development. In this post, I’ll explain why they don’t work as politicians might hope. A common argument in favor of financial incentives is that tax breaks and subsidies motivate firms to […]

Tax Incentives and Subsidies: Two Staples Of Economic Development

By Mr. Jacob Bundrick If you’ve ever wondered why corporate welfare gets such a bad rap, you’ll want to read this post and the five follow-up posts I’ll be publishing over the next few weeks. My goal is to help you understand why governments give tax breaks and subsidies to local businesses and why, even […]