What These States Learned about Wooing Companies with Big Tax Breaks

February 15, 2018. As Amazon nears a decision on the location for its second headquarters, it’s weighing a number of factors about each city: access to transit systems, the size and makeup of the local workforce, available real estate and tax breaks.

Among the offers that have become public: Newark, New Jersey, has floated $7 billion in incentives. Chicago would reportedly kick in at least $2 billion. And Maryland has put more than $5 billion on the table for its Montgomery County contender.

 All of these governments are doing what they think is necessary to attract an investment that could bring as many as 50,000 high-paying jobs to one location. But they need to be careful. If their tax breaks are too generous they could sacrifice whatever benefits might otherwise accrue to the winner.
“At the policy level, it may not be ideal,” says Jonas Shaende, an economist at New York’s Fiscal Policy Institute. “But of course, dealing with the dire circumstances of the employment situation upstate, it has some kind of saving merit.”
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