- "It’s the latest example of a decade-long trend: As good jobs have become harder to find, states have approved bigger economic handouts to attract or keep individual companies," the Washington Post's Jim Tankersley says, referring to the incentive packages states are prepping in an effort to become the next location for the manufacture of Boeing's (BA) 777.
- Some economists now think states may be overplaying their hands — at least in terms of providing tax breaks as incentives.
- "Cutting taxes ... might not be the best way to boost firms’ bottom lines and keep them around," Tankersley says, citing research from Owen Zidar and Juan Carlos Suárez Serrato. "If all that mattered to company location was tax rates, they reason, tech firms wouldn’t cluster in high-tax California," Tankersley notes.
- Instead, states should consider leveraging other factors such as housing and labor costs, infrastructure, and labor supply.
- Meanwhile, California lawmakers are busy lobbying the company to move production of the next-generation 777 to Long Beach.
As states court Boeing, economists suggest looking beyond tax breaks
Dec 26 2013, 09:28 ET