Effects of Big Business Subsidies on Local Economies
Julian Diaz
Eco 212
Tax breaks
Big Business Subsidies
Across the nation corporations have realized that they hold the fundamental building block to the growth of their revenues, and economic growth of small economies. Claiming that merely their presence are the key to fixing local economies. Politicians are willing to funnel, in some cases, millions of dollars from taxpayers pockets and into the wallets of corporations to set up shop in their town. Corporations with capital and willingness to invest are waiting around for the highest bidder, our bidders being the local governments attempting to find a way to a better local economy . These techniques are essentially paying the corporation to set up shop in their local economies. Local governments need to realized that big business as effective as it is in creating new jobs in the short run and stimulating the economy on a macroeconomic scale, are not benefiting the local economy in the long run and some cases short run. In order to truly understand the whys and wherefores for big business’ to not receive local government subsidies, a look into the negative effects of these business on the local economies, and how these subsidies should be allocated to maximize the positive growth of a local town are essential. The use of tax incentives to lure in big business may seem appealing at first but there are both short and long run negative effects, allowing these tax incentives to continue is not benefiting the economy just the large corporations who do not reallocate these resources into the local economy, and what do local governments and economies really see as a result of these tax subsidies.
“Traditional economic development approaches have focused on trying to fill the bath tub while neglecting to plug the drain. An increasing number of communities are now seeking ways to “plug the drain” and limit the dollars that leak out of their local economy”1 Corporations are misleading government officials
Eco 212
Tax breaks
Big Business Subsidies
Across the nation corporations have realized that they hold the fundamental building block to the growth of their revenues, and economic growth of small economies. Claiming that merely their presence are the key to fixing local economies. Politicians are willing to funnel, in some cases, millions of dollars from taxpayers pockets and into the wallets of corporations to set up shop in their town. Corporations with capital and willingness to invest are waiting around for the highest bidder, our bidders being the local governments attempting to find a way to a better local economy . These techniques are essentially paying the corporation to set up shop in their local economies. Local governments need to realized that big business as effective as it is in creating new jobs in the short run and stimulating the economy on a macroeconomic scale, are not benefiting the local economy in the long run and some cases short run. In order to truly understand the whys and wherefores for big business’ to not receive local government subsidies, a look into the negative effects of these business on the local economies, and how these subsidies should be allocated to maximize the positive growth of a local town are essential. The use of tax incentives to lure in big business may seem appealing at first but there are both short and long run negative effects, allowing these tax incentives to continue is not benefiting the economy just the large corporations who do not reallocate these resources into the local economy, and what do local governments and economies really see as a result of these tax subsidies.
“Traditional economic development approaches have focused on trying to fill the bath tub while neglecting to plug the drain. An increasing number of communities are now seeking ways to “plug the drain” and limit the dollars that leak out of their local economy”1 Corporations are misleading government officials