Tax Breaks for Big Business is Bad Policy

So says the Lincoln Institute of Land Policy, releasing a new report that says this all-too-common strategy rarely pays off.

1 minute read

July 4, 2012, 11:00 AM PDT

By Tim Halbur


Report authors Daphne A. Kenyon,  Adam H. Langley, and Bethany P. Paquin explain that there are three obstacles to successful property tax incentives:

"First, incentives are unlikely to have a significant impact on a firm's profitability since property taxes are a small part of the total costs for most businesses-averaging much less than 1 percent of total costs for the U.S. manufacturing sector. Second, tax breaks are sometimes given to businesses that would have chosen the same location even without the incentives. When this happens, property tax incentives merely deplete the tax base without promoting economic development. Third, widespread use of incentives within a metropolitan area reduces their effectiveness, because when firms can obtain similar tax breaks in most jurisdictions, incentives are less likely to affect business location decisions."

The authors say that strategies that work better for long-term economic development include "...customized job training, labor market intermediaries, and business support services."

 The full report is available as a free PDF download.

Tuesday, June 26, 2012 in The Boston Globe

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Close-up of "Apartment for rent" sign in red text on black background in front of blurred building

Trump Administration Could Effectively End Housing Voucher Program

Federal officials are eyeing major cuts to the Section 8 program that helps millions of low-income households pay rent.

April 21, 2025 - Housing Wire

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

April 23, 2025 - Diana Ionescu

Ken Jennings stands in front of Snohomish County Community Transit bus.

Ken Jennings Launches Transit Web Series

The Jeopardy champ wants you to ride public transit.

April 20, 2025 - Streetsblog USA

Bronze or metal Native American mask sculpture in park in Minnehaha County.

‘Minnesota Nice’ Isn’t so Nice When You Can’t Find a Place to Live

The Economic Development and Housing Challenge Program can help address the scourge of homelessness among Indigenous people.

15 minutes ago - Minnesota Reformer

Children and adults biking and hanging out on an Open Street closed to vehicles in New York City during the Covid-19 pandemic.

NYC Open Streets Organizers Call for City Support

The number of open streets projects has dropped year after year as volunteer groups struggle to fund and staff them.

1 hour ago - StreetsBlog NYC

Floor-to-ceiling rotating gates at Fairmount subway station in Philadelphia, Pennsylvania.

Crime Continues to Drop on Philly, San Francisco Transit Systems

SEPTA and BART both saw significant declines in violent crime in the first quarter of 2025.

April 28 - Mass Transit