A Policy Guide to Corporate Handouts
A policy guide from the Mackinac Center for Public Policy challenges the effectiveness of corporate subsidies in Michigan. Examining up to 2,300 incentive deals dating back to 1983, researchers found that most programs failed to produce meaningful job growth, despite costing taxpayers millions of dollars.
Of nine subsidy programs studied, five showed no employment impact and one had a negative effect. The three programs associated with job gains came at enormous costs, including one that offered more than $274,000 per job created annually. The report argues that many subsidized companies would have expanded or relocated even without government assistance.
The findings offer a lesson for state policymakers: Economic development doesn't have to mean picking winners and losers. The report recommends replacing targeted corporate handouts with broad-based tax cuts, occupational licensing reform and other policies that encourage private-sector growth while treating businesses equally.
Read More: A Policy Guide to Corporate Handouts
Related in Tools for Scaling Solutions
A Policy Guide to Corporate Handouts
A policy guide from the Mackinac Center for Public Policy challenges the effectiveness of corporate subsidies in Michigan. Examining up to 2,300 incentive deals dating back to 1983, researchers found that most programs failed to produce meaningful job growth, despite costing taxpayers millions of dollars.
Of nine subsidy programs studied, five showed no employment impact and one had a negative effect. The three programs associated with job gains came at enormous costs, including one that offered more than $274,000 per job created annually. The report argues that many subsidized companies would have expanded or relocated even without government assistance.
The findings offer a lesson for state policymakers: Economic development doesn't have to mean picking winners and losers. The report recommends replacing targeted corporate handouts with broad-based tax cuts, occupational licensing reform and other policies that encourage private-sector growth while treating businesses equally.
Read More: A Policy Guide to Corporate Handouts