Regulating Local Tax Abatement Policies

Arguments and Alternative Policies For Urban Planners and Administrators

Bibliographic Data

ID6329639
AuthorsSamuel Nunn (Indiana University – Purdue University Indianapolis, corresponding author)
Year1994
Volume22
Issue4
Pages574-588
Publication date1994-12-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenuePolicy Studies Journal (JOURNAL)
Journal identifiersISSN: 0190-292X • E-ISSN: 1541-0072
PublisherWiley (PUBLISHER • GB)
DOI10.1111/j.1541-0072.1994.tb01490.x
OpenAlexW1604290475
LanguageEN
Citations received5
References cited20

This article addresses several questions about property tax. abatements in the United States, all directed at why tax abatements should be regulated more closely, and one question about how this might be accomplished. First, are tax abatements “job increment financing” since they are exchanged for future jobs? Public decisionmakers assume that jobs mean tax revenues, but problems emerge when abatements are granted without knowledge of expected jobs, or if local government administrators and planners have no means of holding businesses accountable if their promises are not kept. Second, are local decisionmakers behaving imprudently when they abate multiyear taxes? Using abatements may not always be a particularly prudent way of using public resources. Third, can tax abatements undermine local democracy? Abatements weaken public involvement in city government when citizens have few opportunities to debate decisionmakers about tax exemptions, but they should have such a chance because abatements have costly, longlasting effects on current and future citizens. Fourth, do abatements create social costs? Tax abatements generate external effects for those who are not party to the politics of tax exemptions, but there are no easy answers about how to correct the externalities. Finally, what are the options for stopping tax abatements? These include federal prohibition, cooperative agreements, federal fiscal incentives, the courts, tougher negotiating tactics, and more stringent contractual provisions by urban planners and administrators

Business · Direct tax · Economics · Incentive · Market economy · Property tax · Public economics · Tax credit · Tax reform · Tax revenue · Corporate Taxation and Avoidance · Fiscal Policy and Economic Growth · Local Government Finance and Decentralization · Finance

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