Yet Another Study Showing Tax Breaks Do Not Create Jobs

Study after study shows that tax breaks and other government incentives do not create the number of jobs that are promised in return for such funding.

The latest study to prove this point is by the New York State Authorities Budget Office. As reported in the Buffalo News:

“Back in 2008, the industrial development agencies in Erie County handed out $3.7 million in tax breaks to 18 business that promised to bring more than 450 new jobs to the Buffalo Niagara region.

Five years later, those 18 businesses have combined to bring fewer than three dozen new jobs to the region – each one costing taxpayers an average of more than $112,000 in subsidies.”

Yet every election candidates running for local and state offices talk about how they are going to create jobs. The talk never matches the reality. Government needs to get out of the economic development business. State and local economic development offices are used for:

– Patronage positions
– Funneling money to businesses who in turn provide campaign dollars to elected officials
– Press conferences for elected officials to cut ribbons

Check out other posts I have done on this topic:

http://reinventinggov.org/2011/11/21/court-allows-economic-development-illusion-to-continue/
http://reinventinggov.org/2011/10/13/end-taxpayer-subsidies-for-economic-development/

Studies going back several years show that tax incentives to create jobs just do not work:

http://www.nydailynews.com/new-york/bronx/firms-industrial-development-agency-tax-breaks-aid-bronx-cut-jobs-article-1.456670
http://www.alignny.org/wp-content/uploads/2011/11/Regional-Review.pdf
http://fiscalpolicy.org/ida%20reform.pdf
http://www.cbcny.org/sites/default/files/report_ez_12012009.pdf
http://www.osc.state.ny.us/press/releases/mar04/030904.htm

Do you think it is time to end the insanity of politicians funneling tax dollars to private businesses?

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Henry Brown

Not sure I wouldn’t reverse 1 and 2 regarding benefits for the elected officials/politicians…

Would offer that although your blog post was mainly discussing the effect on state/local government tis more than a grain of salt of relatively for the politicians on the federal level