The price tag of economic development incentives

This article explores the impact of property tax abatements on tax rates. Using the case study approach, the research uses data from Monroe County, Indiana, and finds that the impact of abatements on tax rates is negligible. The method consists essentially of calculating the difference between actual tax rates and hypothetical tax rates assuming abatement are not awarded. The results suggest that public officials may see in abatements a symbolic and relatively harmless policy tool for purposes of garnering political support from businesses and citizens. The article discusses these findings in light of current law suits brought against prominent abatement programs

Ad valorem tax · Business · Economics · Incentive · Law and economics · Microeconomics · Political science · Politics · Property tax · Public economics · Tax credit · Tax reform · Fiscal Policy and Economic Growth · Law · Local Government Finance and Decentralization · Taxation and Compliance Studies

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