• The home mortgage interest deduction greatly incentivizes the home-building, mortgage banking, title insurance, building materials mfg., real estate development, real estate sales...even home furnishings and finishes since we do more with property we own.
• Building good paved roads, highways, and public parking lots incentivizes driving.
• Ag tax incentives....well that's endless and practiced by every country so nobody produces in a market undistorted by tax incentives.
• Service businesses get a tax incentive in communities that primarily tax physical property and physical goods (sales taxes).
• The deductibility of employee benefits is a considerable tax incentive for larger businesses...just ask a solo entrepreneur about their health insurance deductibility.
• Offsetting public infrastructure costs onto other residents, future generations, or other locations' taxpayers (i.e. federal funding) is a major tax incentive since you don't have to pay the true cost of what you use whether its roads, schools, water treatment, universities, etc.
• Having your most skilled or deeply trained employees trained mostly at their own and public expense through public schools and public campuses is a major tax incentive for white collar employers while typically far less for blue collar employers since public education neglects most technical skills anymore, making training far cheaper workers overseas make economic sense.

To misquote Joel Chandler Harris, you're wrassling a bundle of sticky tar here and the harder you try, the more enmeshed you'll become. It takes a very quick and shallow look to have anything definitive to say about tax incentives, the more you think about it the more you'll keep saying "it depends..."

Some Resources Suggested: Two books published in cooperation with Upjohn Insititute:

• State Enterprise Zone Programs: Have They Worked? by Alan Peters and Peter Fisher
• Industrial Incentives by Fisher and Peters

James C. Cobb's superb book The Selling of the South, 1936-1990 is the best I've found, richest data set, longest time horizon, deepest deal analysis, broadest look at impacts pro and con, and he tracks 13 Southern states so it should be particularly relevant to you. Cobb's a history professor at the University of Georgia in Athens who specializes in modern Southern history...be worth interviewing directly since he's so close to you and has been thinking about this for 20 years.

Tax Increment Financing & Economic Development, Craig L. Johnson & Joyce Y. Man editors, is a thorough and recent look at the many ways this tax incentive can be used and is used across the country. Expert practitioners are the contributors, it's a top-notch reference and very balanced.

The more narrow use of historic preservation tax credits, particularly for downtown revitalization, might best be explained in Donovan Rypkema's The Economics of Historic Preservation, A Community Leader's Guide...Rypkema is part of the National Trust for Historic Preservation's Main Street program.

The most entertaining and perhaps most instructive is Cronies by Robert Bryce which traces how the biggest tax incentive of the 20th Century, the Oil Depletion Allowance, allowed the development of the oil production, pipeline, refining, and overseas infrastructure that create and sustain the political capital to incentivize what becomes the Dallas-Fort Worth aerospace complex and the Austin computer industry cluster. Bryce is an Oklahoma reporter who's followed Texas for decades and it's an amazing tale of how a state can do economic development as a long-term strategy (70+ years).

The first one I read on this topic, The Last Entrepreneurs by Robert Goodwin which is about 25 years old now is an investigative reporter's outrage at specific deals and patterns of lavish incentives to get new industrial facilities. Similar I suspect to Great American Job Scam. Cobb's is the most definitive look I've found and left me confused, illuminated, encouraged, discouraged, and satisfied with how far he dug and his sophistication on many angles.

The magazine and website for Expansion Management, which is focused on recruiting, site comparisons, state to state metrics, etc. you'll also find full of helpful information on this, especially for specifics on tax incentives currently being offered by various states like Oklahoma's manufacturing job training one, Louisiana's film production tax breaks, etc.

The Minneapolis Fed did a conference on this topic a few years ago--follow this link: http://minneapolisfed.org/research/studies/econwar/ The University of Minnesota had a conference on this topic, too--follow this link: http://www.hhh.umn.edu/projects/prie/c4c_papers.html

www.entreworks.net

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