By Caleb Taylor Jacob Bundrick and Dr. Tom Snyder will speak before the State Agencies & Governmental Affairs – Senate Constitutional Issues Subcommittee at 1 p.m. Monday in the Old Supreme Courtroom at the State Capitol regarding their research examining the effects of targeted business subsidies on economic growth. Bundrick and Snyder’s working paper titled […]
subsidies
“Reason To Be Skeptical” Of Business Subsidies, Bundrick Says
By Caleb Taylor ACRE Policy Analyst Jacob Bundrick discussed state government’s track record in creating jobs with cash subsidies through the Quick Action Closing Fund in an op-ed published on January 20th in the Arkansas Democrat-Gazette. The Quick Action Closing Fund (QACF) allows the state to provide cash grants to select entities in the hopes […]
Issue 3 and Local Economic Development
By Mr. Jacob Bundrick Will Issue 3 bring jobs or bankruptcy taxes? Issue 3 proposes to allow local governments to appropriate tax dollars directly to private companies for economic development projects and to pay private organizations for economic development consulting work. Issue 3 would also expand the type of projects for which local debt can […]
Issue 3: Unleashing Economic Development Bonds
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 […]
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 […]
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 […]