scholarly journals Evaluating State and Local Business Tax Incentives

2020 ◽  
Author(s):  
Cailin Slattery ◽  
Owen Zidar
Keyword(s):  
Tax Incentives ◽  
Local Business ◽  
Business Tax ◽  
State And Local

scholarly journals Evaluating State and Local Business Incentives

2020 ◽  
Vol 34 (2) ◽  
pp. 90-118 ◽  
Author(s):  
Cailin Slattery ◽  
Owen Zidar
Keyword(s):  
Local Level ◽  
Tax Incentives ◽  
The United States ◽  
Service Industries ◽  
Tax Credits ◽  
Tax Rates ◽  
Local Business ◽  
Per Capita ◽  
State And Local ◽  
Specific Tax

This essay describes and evaluates state and local business tax incentives in the United States. In 2014, states spent between $5 and $216 per capita on incentives for firms in the form of firm-specific subsidies and general tax credits, which mostly target investment, job creation, and research and development. States with higher per capita incentives tend to have higher state corporate tax rates. Recipients of firm-specific incentives are usually large establishments in manufacturing, technology, and high-skilled service industries, and the average discretionary subsidy is $178M for 1,500 promised jobs. Firms tend to accept subsidy deals from places that are richer, larger, and more urban than the average county, and poor places provide larger incentives and spend more per job. Comparing winning and runner-up locations for each deal, we find that average employment within the three-digit industry of the deal increases by roughly 1,500 jobs. While we find some evidence of direct employment gains from attracting a firm, we do not find strong evidence that firm-specific tax incentives increase broader economic growth at the state and local level.

Tourism and urban economic growth: A panel analysis of German cities

2019 ◽  
Vol 26 (3) ◽  
pp. 519-527 ◽  
Author(s):  
Bart Neuts
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Income Tax ◽  
Tax Revenue ◽  
Wealth Creation ◽  
Urban Economic ◽  
Real Gdp ◽  
Local Business ◽  
Business Tax ◽  
German Cities

Even though cities are among the most important tourist destinations, research on tourism as a vehicle for economic growth – most often approached via the tourism-led growth hypothesis (TLGH) – has predominantly been limited to countries. This study explores the validity of the TLGH in an urban context. Panel data were collected for 89 German cities on different indicators of urban economic growth. Pedroni panel cointegration confirmed a long-term equilibrium between tourism, local business tax revenue, income tax revenue and real GDP, indicating that even for cities within a strong, developed economy, tourism contributes to wealth creation. A Panel Granger causality analysis established a one-way Granger causal relationship from tourism to local business tax and income tax and a bidirectional relationship between tourism and real GDP. This causal relationship was stronger for cities with a high to medium tourism intensity.

scholarly journals Tax Incentives: An Effective Development Strategy for Rural Communities?

2002 ◽  
Vol 34 (2) ◽  
pp. 319-325 ◽  
Author(s):  
Daniel V. Rainey ◽  
Kevin T. McNamara
Keyword(s):  
Rural Communities ◽  
Development Strategy ◽  
Rural Areas ◽  
Local Governments ◽  
Tax Incentives ◽  
Economic Opportunity ◽  
Capital Investments ◽  
Local Economies ◽  
State And Local ◽  
Effective Development

As national and local economies become more globalized, many rural areas are going to find it more difficult to compete for private capital investments. A traditional tool, modifications to tax policy, of state and local governments will not be as effective (for many communities it has never been effective) in the future. These communities will need to seek other avenues of growth. However, for many rural communities even alternative avenues will not lead to enhanced economic opportunity.

The German Property Tax as a Local Business Tax

1987 ◽  
Vol 5 (1) ◽  
pp. 81-88 ◽  
Author(s):  
R-D Postlep
Keyword(s):  
Economic Growth ◽  
Local Government ◽  
Business Cycle ◽  
Property Tax ◽  
Local Property ◽  
Financial Resources ◽  
Spatial Allocation ◽  
Local Business ◽  
Business Tax

In this paper the property tax (Grundsteuer B) in Germany is evaluated as a local business tax. The tax is discussed from the perspective of its impact on economic growth, business cycle behaviour, and the spatial allocation of local government financial resources. It is concluded that, taken together, the impacts of the local property tax do not suggest that the tax could not be used to a greater extent, particularly when compared with the present local business tax on profits and assets.

A Local Income and Corporation Tax as an Alternative to the German Local Business Tax

2006 ◽  
Vol 226 (3) ◽  
Author(s):  
Ralf Maiterth ◽  
Markus Zwick
Keyword(s):  
Tax Rates ◽  
Corporation Tax ◽  
The Core ◽  
Local Business ◽  
Permanent Establishment ◽  
Federal Statistical ◽  
Humboldt University ◽  
Business Tax ◽  
Rural Character ◽  
The Impact

SummaryThe paper empirically analyses the impact on individual municipalities of replacing the German local business tax by a local surcharge on income and corporation tax. The microsimulation models used for this and refined for the present paper originate in calculations carried out for the Federal Ministry of Finance in cooperation between the Federal Statistical Office and the Humboldt University in Berlin. The data basis is formed by the roughly 30 million individual data sets of the most up-to-date income and local business tax statistics provided by the Federal Statistical Office. A local surcharge tax which, like the BDI/VCI model analysed, assigns tax revenue incurred on profits to the municipality of permanent establishment and that on other income to the domicile municipality, affects the revenue situation of the municipalities in highly differing ways. The losers in such a local tax reform include those municipalities in which an above-average number of industrial and commercial enterprises are resident. These are the “core towns” of the Old Federal Laender in particular. By contrast, the revenue situation of the surrounding municipalities and of the municipalities with a rural character would considerably improve on average. However, the core towns in the New Federal Laender which are currently tax-weak because they have little industry would also improve their revenue situation in most cases by applying a surcharge tax. In order to maintain the financial status quo, the core towns in the Old Federal Laender in particular would have to levy relatively high local tax rates, whilst the surrounding municipalities would be able to become more attractive by applying tax rates which as a rule would be much lower. The consequence of this would be that highincome earners in the core towns would have a not inconsiderable incentive to change their place of residence for tax purposes, which would further worsen the financial situation of the core towns.

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