Economic development incentives such as tax abatements are often simply presumed to work by their proponents. But the real-life consequences of incentives gone wrong are rarely considered, and yet affect real lives and real families.
 
The study that the Center for Local Governance released today, The Failure of Tax Abatements: Corporate Handouts That Just Don’t Work For Taxpayers, looks at a case of tax abatements gone wrong in Corsicana, Texas.
 
When Corsicana began a tax abatement agreement with Home Depot for a distribution center in 2006, it was hoping to create 250 net new jobs in the city to help residents have more employment opportunities. But in 2011 late, Home Depot announced it was picking up and moving to Dallas. Why? Dallas offered a better deal than Corsicana could. Another company that had benefited from a tax abatement closed up shop the same week. When the dust settled, roughly 280 jobs in some way linked to tax abatement agreements had been lost in Corsicana.
 
And so goes the story of local economic development in Texas. Cities cannibalize one another in the name of creating jobs. And some businesses get used to shopping around for incentives. This isn’t the free market, and it certainly isn’t fair to the small businesses who pick up the tab for the beneficiaries of this government largesse.
 
When jobs are lost because of crony capitalism, few take notice, but the families of those who lose their jobs sure do. It’s not something that can be glossed over: when government messes with the economy, it messes things up.
 
Read more in the the study here. And make sure to tweet out your support of Texas taxpayers and opposition to corporate welfare by using the hashtag #EndCronyism