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Expert opinion: do tax credits and business incentives create jobs?

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Articles - April 2013
Monday, April 01, 2013



0413 FOB ExpertOpinionOregon’s tax credits and other business incentives have attracted significant media attention recently, from Nike’s 30-year corporate tax agreement deal to allegations that SoloPower failed to deliver on job-creation promises despite landing $20 million in tax credits. The 
state and local governments extend hundreds of millions of dollars each year in property tax waivers, corporate income tax credits, rebates and loans. Yet the question remains: Do tax credits and incentives actually create jobs?

Tim Duy Senior Director, Oregon Economic Forum

“You’re playing something of a game with incentives and business strategies — sometimes you’re going to win and sometimes you’ll lose. It’s a zero-sum game that plays states and cities against each other, shifting jobs from location A to location B. The reality is that there will always be a political force pushing for business development incentives, so the real issue is how to structure those incentives in such a way to maximize our benefits and minimize our risks as a community.”

Chuck Sheketoff Executive Director, Oregon Center for Public Policy

“Business tax incentives don’t create jobs. They siphon money from what really creates a favorable business climate: strong public structures and a strong middle class. Taxes are at best a minor factor in investment decisions. Customer location, an educated and skilled workforce, quality public infrastructure — these are what really matter. Sure, some corporations will gladly take and even extort state tax subsidies for actions they were going to do anyway. Rather than subsidize profitable corporations, we should invest in top-notch education, health care, infrastructure and workforce training systems that will strengthen Oregon’s economy.”

Rachel Shimshak Executive Director, Renewable Northwest Project

“Incentives create jobs in partnership with other policies, like the renewable energy standard and the Energy Trust of Oregon. On the federal level, every energy resource benefits from tax policy. But renewables face market barriers, as some of the benefits associated with them — good for the environment, no carbon output — aren’t reflected in the cost, and there’s no way to quantify them. So we turn to policy to reduce the impact of these market barriers. The investments have created jobs, but they’ve also created a long-term benefit for the state by helping support local communities.”



+3 #1 Just one part of whole systemGuest 2013-04-16 18:32:57
Taxation is just one part of what helps a region foster entrepreneurshi p, self-sufficienc y and job creation. We need to look at larger scale examples to see that states with lower taxation and restriction on job creation tend to have more economic activity and lower unemployment. When we get government spending/debt under control it creates economic opportunity through greater certainty. Who wants to set up business in a state that could confiscate more and more of hard earned returns?
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