The Billions Being Wasted in the Economic Development Subsidy Wars
1 Sep 2021
Seeking to create jobs and help their local economies climb out of the pandemic recession, state and local officials are raising the ante on subsidies to big corporations. But if history is any guide, ever-increasing tax breaks and other economic development incentives will likely lead to slower — not faster — growth. Given that state and local governments have already been wasting $95 billion every year in an economic race to the bottom, more subsidies will just dig the hole deeper.
Take New Jersey, for example. It made national headlines when its previous state subsidy program collapsed in corruption and scandal, but the state recently replaced it with an even larger $14 billion program. And this spring North Carolina announced its largest-ever subsidy: $865 million in its successful bid for Apple’s first East Coast research and development center and the 3,000 new jobs the company promises to bring.