Why Cities Shouldn’t Lure Companies With Tax Breaks

The competition for Amazon’s second headquarters has gotten a lot of attention recently. And that makes sense. After all, cities have offered Amazon billions of dollars in tax incentives, free workforce training, and all sorts of other perks. Bloomington, Minnesota, even suggested building a monorail. But cities and states aren’t just trying to woo Amazon. They’re fighting over all sorts of corporations. And that might be a big mistake. Nathan Jensen, a professor at the University of Texas at Austin and co-author of Incentives to Pander: How Politicians Use Corporate Welfare for Political Gain, explains what’s going on in the incentives arms race.