Tax Breaks for Big Business is Bad Policy

So says the Lincoln Institute of Land Policy, releasing a new report that says this all-too-common strategy rarely pays off.

1 minute read

July 4, 2012, 11:00 AM PDT

By Tim Halbur


Report authors Daphne A. Kenyon,  Adam H. Langley, and Bethany P. Paquin explain that there are three obstacles to successful property tax incentives:

"First, incentives are unlikely to have a significant impact on a firm's profitability since property taxes are a small part of the total costs for most businesses-averaging much less than 1 percent of total costs for the U.S. manufacturing sector. Second, tax breaks are sometimes given to businesses that would have chosen the same location even without the incentives. When this happens, property tax incentives merely deplete the tax base without promoting economic development. Third, widespread use of incentives within a metropolitan area reduces their effectiveness, because when firms can obtain similar tax breaks in most jurisdictions, incentives are less likely to affect business location decisions."

The authors say that strategies that work better for long-term economic development include "...customized job training, labor market intermediaries, and business support services."

 The full report is available as a free PDF download.

Tuesday, June 26, 2012 in The Boston Globe

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

June 25, 2025 - Diana Ionescu

Map of Western U.S. indicating public lands that would be for sale under a Senate plan in yellow and green.

Map: Where Senate Republicans Want to Sell Your Public Lands

For public land advocates, the Senate Republicans’ proposal to sell millions of acres of public land in the West is “the biggest fight of their careers.”

June 19, 2025 - Outdoor Life

Person wearing mask walking through temporary outdoor dining setup lined with bistro lights at dusk in New York City.

Restaurant Patios Were a Pandemic Win — Why Were They so Hard to Keep?

Social distancing requirements and changes in travel patterns prompted cities to pilot new uses for street and sidewalk space. Then it got complicated.

June 19, 2025 - Diana Ionescu

Close-up of full beer glass with purple train-themed design sitting on bar between two frosty tall cans.

Platform Pilsner: Vancouver Transit Agency Releases... a Beer?

TransLink will receive a portion of every sale of the four-pack.

June 30 - Cities Today

Vintage red Toronto streetcar passing in front of Rogers Arena in Toronto, Canada.

Toronto Weighs Cheaper Transit, Parking Hikes for Major Events

Special event rates would take effect during large festivals, sports games and concerts to ‘discourage driving, manage congestion and free up space for transit.”

June 30 - blogTO

Map of Berlin with ring roads in green and red.

Berlin to Consider Car-Free Zone Larger Than Manhattan

The area bound by the 22-mile Ringbahn would still allow 12 uses of a private automobile per year per person, and several other exemptions.

June 30 - Streetsblog USA

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.