This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Similar articles in Web of Science Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Luger, M. I. Articles by Bae, S. Search for Related Content Social Bookmarking                         What's this?

The Effectiveness of State Business Tax Incentive Programs: The Case of North Carolina

Suho Bae

University of North Carolina at Chapel Hill

The authors propose a practical way to estimate the effectiveness of state tax incentives. They simulate how much taxpayers'costs are reduced by tax incentives and how those reductions are likely to increase employment. That enables them to address the critical but elusive counterfactual question about the induced rather than gross effects of tax incentives. The importance of this article is not in the elegance of its approach but in its application. The authors demonstrate how a straightforward model can be used to help inform critical decisions that thus far have had little useful input from analysts. Their approach is easily replicable. The simulation results are easy for policy makers to understand. The power of this relatively simple approach has already been demonstrated in North Carolina, where its use is helping to shape tax incentive policy.

Key Words: state tax policy • simulation and modeling • economic development

Economic Development Quarterly, Vol. 19, No. 4, 327-345 (2005)
DOI: 10.1177/0891242405279684


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?