Tax Abatement Incentives – Do We Need Them?
This paper defines tax abatement and its various incentive forms and gives a brief history of the development and proliferation of tax incentives as a tool for economic development. Also discussed are the pros and cons regarding the effective use of incentives to generate economic development and to increase the tax base. The general conclusion is that incentives were implemented incrementally; some are beneficial. But they should be used more sparingly and more pointedly-and gradually decreased incrementally. However, the prospect of job creation is very alluring to development directors, so it is likely that incentives will continue for the foreseeable future (Butera 3).
Here are a few highlights: …”Companies request abatement, not because it is necessary for their expansion, but mostly because it is offered. Others, however, frequently refuse incentives because of the “red tape” or inherent delays incurred during the expansion process” … Continue reading