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 […]
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 […]
State Incentives in Arkansas: A Friendly Debate in the Arkansas Democrat-Gazette
ACRE’s analysts and economists have recently engaged in a friendly debate on an important topic: whether Arkansas’ business tax incentives and subsidies are necessary. The debate took place over the past few weeks on the op-ed pages of the Arkansas Democrat-Gazette, the state’s largest circulation newspaper. Jacob Bundrick, ACRE policy analyst and UCA alum, started […]
Making Cents of $18 Million
By Jeremy Horpedahl Is $18 million a small amount? Is one-fourth of a cent a large amount? On Super Tuesday, voters in Pulaski County will not only be selecting presidential candidates. They are also deciding whether the sales tax will be increased by one-quarter of a percentage point to provide $18 million for funding of […]
Taxes Take their Toll on Arkansas Manufacturing
By Mr. Jacob Bundrick Arkansas and the states belonging to its region continue to rely on the manufacturing industry for economic growth and jobs. Among its neighbors, however, Arkansas is the least competitive in the industry. Bureau of Economic Analysis (BEA) data shows Arkansas’ manufacturing GDP has grown at an annual rate of less than […]