If you feel queasy about John Carney style “economic development” that mindlessly throws tax breaks at companies to try and lure them to the state, you have good reason to feel queasy.
This article about Amazon’s corporate welfare (h/t RE Vanella) explains why tax breaks are a terrible deal. In short:
1) They don’t influence company location decision, so they are shit as a marketing tool.
2) They increase everyone else’s taxes.
3) The trade off’s are too high and simply not worth it.
It is worth asking what are the tradeoffs politicians are willing to impose on taxpayers in order to shower Amazon with privilege. Farren and Philpot look at this matter too. They have a great table on page 13 of their report that shows that New York, with the money that’s now going to Amazon, could have paid for three years of road maintenance or have reduced the corporate income tax rates by 5.42 percent, which would benefit ordinary companies without political favor. Virginia could have reduced the corporate income tax by 45.16 percent and maintained the roads for four years with that money. Congrats Amazon and sorry everyone else!