Here’s What’s Wrong with Economic Development Incentives:



They Cost a Lot:

The average state could cut its corporate taxes by a third or its personal income taxes by almost 10 percent if it stopped subsidizing a few favored companies.

They Weaken Communities:

Money that goes to incentive deals isn’t available to fund local schools, police & fire departments, roads and other public services on which people depend.

They Just Don’t Work:

The evidence shows incentives generally don’t change companies’ plans or create any more jobs or economic growth than would have existed without them. They can even hurt local economies, reducing entrepreneurship and innovation and increasing inequality.


You Deserve the Whole Truth

Each year, state and local politicians across America hand out more than $70 billion in tax breaks, subsidies and other incentives, mostly to large corporations.

They justify this massive transfer of public resources to private companies in the name of “job creation” and “economic development.” If we don’t participate in this arms race, we’re told, economic growth will pass our communities by.

The problem is that this simply isn’t true.

History, economic data and mountains of independent academic research from across the political spectrum tell a different story. Far too often, the costs of the programs outweigh their benefits to the communities that fund them. But they continue to grow — tripling in size since just 1990 — because the people who make these deals keep benefiting while the rest of us pay those costs.

Economic development is an industry where people in power have incentives to use that power for their own personal benefit.

Politicians have an incentive to take credit with voters for economic growth and job creation. Businesses have an incentive to keep the free money flowing and increase profits. Bureaucrats have an incentive to create job security by approving more and bigger deals. Everyone involved has an incentive to keep the deals coming, regardless of whether they benefit communities. This is why the economic development industry has come to triple in size since just 1990, while rejecting transparency and reform.

That’s where the Center for Economic Accountability comes in.

CEA logoWe are an independent and nonpartisan group that works with researchers and experts from around the nation and across the political spectrum to help the average American learn the truth about economic development incentives. We present real evidence, we make sure both costs and benefits are discussed and we shine a light on secret dealings. Our goal is to ensure Americans have all the information they need to demand meaningful transparency and accountability from their local business and government leaders.

When informed citizens and consumers are holding them accountable, politicians and businesses will be more likely to support economic development policies and make deals that are good politics, good business and good for the entire community.

That’s why we’re here, to help you get the whole story.

We hope that you’ll make up your own mind and be a part of helping your community make smart decisions that work for everybody. And yes, when it comes to state and local economic development, even just a few informed and engaged citizens can make a big difference.

Best of all, if you’re sick of partisan politics or frustrated by how hard it is to make a difference, this is a topic where you can find unexpected allies and power in partnerships. That’s because development incentives aren’t about right versus left or red versus blue: Democrat, Republican and independent politicians are equally involved in these deals across the nation.

This is about our communities. This is about Us versus Them.

It’s about people in power abusing that power for their own benefit. It’s about the toxic combination of big business and big government, where the rest of us can find common ground in opposing the marriage of “the swamp” and “the one percent.”

You might not be able to change the way things work in Washington, DC or on Wall Street, but you can still make a difference on Main Street.

Learn More. — Get Involved.