Business-targeted tax cuts do not improve state economies

On the surface, cutting business taxes would appear to be an obvious way for states to attract new business investment, and therefore growth and jobs. Soledad Artiz Prillaman and Kenneth J. Meier have studied business tax incentives across the 50 states over the past 30 years, and find that this is largely not the case, and that tax reductions can actually be harmful to state economies by reducing tax revenues and thus their ability to provide public services. They argue that given the already low tax burden on many companies, businesses are much more likely to decide on their location based on factors such as workforce education, land prices and public service levels.