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The Uselessness of Economic Development Incentives

States, cities and counties give away $80 billion per year, but that doesn't seem to create stronger economies or lower unemployment.
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Rebecca Cook/Reuters

This week, the New York Times ran an important series of articles on state and local incentives to business. The reporting was terrific, but even better is the data set the Times put together on the scale and scope of these incentives. The paper points out that its reporters spent some 10 months compiling data from states, cities, and counties.

All told, states, cities, and counties give away some $80 billion to companies each year, including both expenditures and tax abatements, according to the Times' estimates. There are 48 companies which have received more than $100 million in incentives since 2007, led by General Motors, which took in a whopping $1.77 billion in incentives. Other companies that are part of the $100 million incentive club include: Ford, Chrysler, Daimler, General Electric, Shell, Dow, Amazon, Microsoft, IBM, Google, Caterpillar, Procter & Gamble, Sears, Boeing, Airbus, Panasonic, and Electrolux. More than 5,000 companies received one million dollars or more in incentives, according to the Times' estimates.