Governments Rethink Corporate Tax Breaks.

• Position: Brief Article

At a time when businesses are enjoying record profits, tax incentives for corporations are costing state and local governments $15 billion a year, according to a study by the University of Missouri at St. Louis. Some officials are beginning to question these long-standing economic development policies, created in the 1970s and 80s when unemployment was twice current levels. Dozens of states and municipalities have passed "clawback laws" that reclaim taxes and subsidies if a company does not create all the jobs promised when it first applied for the subsidies. Illinois, for example, can recover the funds from income and sales tax breaks with interest if it can prove the company would have expanded anyway. At least 56 cities, counties, and states have attached jobquality standards to subsidy packages. These include requirements that subsidized jobs pay wages significantly above the minimum wage, be full-time, and...