Thursday, September 8, 2011

Tax Credits are Not Monopoly Money

Bruce Stahl of the Show-Me Institute has a new post on that points out the obvious, but usually overlooked, fact that tax credits for economic development projects are actual taxpayer money that could have been used for something else.  The post includes a map of St. Louis city and the places were tax credits were issued.  Click on the map and you'll go to another post that lists the distribution of Missouri tax credits by county.  St. Louis city alone accounted for about 46 percent of all credits issued since 1999.  This is a startling figure considering that the city accounts for less than 6 percent of Missouri's population.  Put another way, the city of St. Louis received close to $3,400 per resident, whereas the state as a whole issued only about $393 per resident.

I have a Show-Me Institute report coming out soon that surveys the existing evidence on the effective of state tax credits in generating employment.  In short, there is, at best, scant evidence of such an effect.