As the country continues to struggle with the impact of the COVID-19 pandemic, state and local governments facing budget shortfalls have had to make some hard choices. One choice, however, should be easy: moving away from targeted tax incentives in favor of comprehensive tax reform.
In normal economic circumstances, states and localities often attempt to spur economic development by offering businesses temporary, targeted tax incentives in order to move to their jurisdiction. One well known episode was the bidding war for Amazon’s new headquarters, with some localities going so far as to offer Amazon the revenue from the income taxes of its own employees.
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