Work

Tax Incentives and the City

Year: 2002

Type: article

Abstract: It is difficult to justify tax incentives within the existing economics literature on tax competition. We develop a model in which communities are interested in attracting firms not only for their own capital but also for the "concentration externalities," a form of agglomeration economies, their location bestows on existing firms. We find that it is efficient in this case for communities to offer tax incentives, defined as a tax rate below the benefit tax level, to firms. We present the recent relocation of the Boeing Corporation's headquarters from Seattle to Chicago as a case study.

Source: Brookings-Wharton papers on urban affairs

DOI: 10.1353/urb.2002.0005

Authors: Teresa Garcia-Mila, Therese J McGuire

Language: English

Topic: Local Government Finance and Decentralization

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: green

OpenAlex ID: W3124527345

FWCI: 9.217

Cites: 39

Cited by: 54

Related to: 10