The Need For a New Political Playbook Which Mitigates the Public Harm Caused by Tax Incentives

Authors

Robert Louis Perkins

Publication Date

Spring 2024

Abstract

This article is politically pragmatic and written with a clear acknowledgement that tax incentives will continue to be utilized by policymakers, despite data continuing to reflect that the actual influence tax incentives have in determining where a company or industry locates is often exceeded by their cost. Government investment in public services such as education and infrastructure are often scaled back to accommodate the cost of the incentives. However, public officials have strong incentives of their own which encourage them to rely on these costly measures. These incentives include the resulting political points they score from being able to take credit for creating jobs. Since there is a lack of political will to stop offering tax incentives, this article first reviews how tax incentives are used and how to evaluate their impact. Next, a review of recent incentive packages around the country and in Alabama and Mississippi provides a framework for incentive use. An examination of the negative consequences of tax incentives demonstrates how communities often receive far less than the promised benefits from offering the packages. The article then provides an explanation for why public officials continue to rely on tax incentives. Finally, the article presents solutions designed to increase transparency and accountability, which will mitigate the most harmful consequences of tax incentives.

Recommended Citation

Perkins, Robert Louis (2024) "The Need For a New Political Playbook Which Mitigates the Public Harm Caused by Tax Incentives," Mississippi College Law Review: Vol. 38: Iss. 1, Article 6.
Available at: https://dc.law.mc.edu/lawreview/vol38/iss1/6