By Dr. Jeremy Horpedahl and Mr. Jacob Bundrick Issue 3 is a complicated ballot measure. The bill runs 9 pages of legal text and it amends at least six sections of the Arkansas Constitution. No wonder voters are confused! In this blog post, we will discuss the benefits and costs of Issue 3’s major […]
ACRE Review
ACRE Scholar & Analyst Testify Before Legislature
By Dr. Jeremy Horpedahl and Mr. Jacob Bundrick Two members of the ACRE team recently testified before two important committees of the Arkansas State Legislature. On September 20, 2016, Jacob Bundrick and Dr. Jeremy Horpedahl testified before a joint session of the House and Senate Committees on Revenue and Taxation. The purpose of their testimony […]
Why Tax Incentives for Sports Venues and Film Production Fail
By Mr. Jacob Bundrick Recently, I’ve written about how financial incentives that states provide to businesses in the form of tax breaks and subsidies don’t increase economic activity, have fiscal costs, are ineffective in steering the economy, and lack taxpayer protections when the firms that get money don’t meet their promises. In my final post […]
Can We Simply Raise the Bar on Teacher Quality?
By Dr. Mavuto Kalulu Academic research shows that teacher effectiveness plays a critical role in student learning. One study (Hanushek, 2011) shows that the difference between an effective teacher and an ineffective one can be as much as a year’s worth of learning. In order to ensure the quality of teachers, states require teachers to pass qualifying exams, […]
Why Financial Incentives for Businesses Put Taxpayers at Risk
By Mr. Jacob Bundrick Supporters of financial incentives for businesses argue that incentives are designed to protect the taxpayers who pay for them. Tax incentives generally pay out only after a company makes a business investment. An example is the tax credit for 1 percent of payroll that Elyxor will receive for creating 45 jobs […]
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 […]
More to Choose: School Choice and Friedman’s Vision
By Dr. Mavuto Kalulu Today, the Arkansas school choice menu includes district transfers, charter school options, and home schooling. Beginning this fall, the menu has been expanded to include a limited voucher program that will only be served to special needs children. While this menu may satisfy some, there are unnecessary limits. For starters, these […]
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 […]