From Edward Alden and Bernard L. Schwartz of the Council On Foreign Relations and Rebecca Strauss, Associate Director, Renewing America Publications:
"Each year, U.S. state and local governments spend tens of billions of dollars to lure or retain business investment. The subsidies waste scarce taxpayer dollars that could better be used to strengthen public services such as education and infrastructure, or to lower overall tax burdens to create a more favorable investment climate."
The Problem:
"State and local governments use targeted subsidies to attract or retain specific businesses. The subsidies can be in the form of tax breaks, cash payments, generous loan terms, or discounted public services. There is no formal accounting of these subsidies in government budgets."
They continue:
"Rarely do the benefits of these subsidies exceed the costs."
Something Greensboro's working classes didn't need the WTO to make them aware of but now that the world's largest trade organization has made it common knowledge let's see it Mayor "Incentivize It" Vaughan will change her spendy ways.
Via Jonathan Morgan who writes:
" The memo outlines the need for enforceable rules that would govern the use of incentives and looks to international models for inspiration and guidance. The recommendations include: 1) requiring state and local governments to report incentives to a “federal data warehouse”; 2) state mandated cost-benefit analyses for all incentive deals above a certain amount; 3) creating regional compacts to discourage counterproductive incentive competition; and 4) stricter incentive/subsidy rules within the World Trade Organization (WTO) with greater U.S. compliance.
Sensible reforms or wishful thinking? What do you think?"
I think it's about time our leaders showed real courage and bucked the trends.
