Thursday, January 15, 2015

The Mercedes Benz of state tax competition

State-to-state tax competition continues unabated: Georgia has successfully lured Mercedes Benz away from New Jersey, presumably with a very generous package of employer- and capital-friendly tax and other regulatory policies. Politicians everywhere run on jobs & growth. Tax competition is about seeking a temporary displacement to your jurisdiction at the expense of another. Temporary because you are only as good as your last tax break, zero is not the bottom, and excessive tax reductions are unsustainable.

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