Carrier deal: ‘ineffective’ and ‘very costly’
An expert broke down the effectiveness and cost of the kind of deal Trump made.
Carrier also confirmed in a press release on Wednesday night that it is getting economic incentives from the state, which “were an important consideration.” Various outlets reported that those incentives will amount to $7 million over a decade, or $700,000 a year…
Meanwhile, Indiana residents will shoulder the cost of the $7 million incentive package. But if past evidence is any guide, they won’t get much actual benefit for it.
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Nathan Jensen, a professor at the University of Texas, Austin, has conducted his own studies of such economic incentive programs in Kansas, Missouri, Maryland, and Virginia, as well as reviewed the best academic work on the subject. What all the research shows is that somewhere between two-thirds and three-quarters of the incentives don’t actually have an impact on companies’ decisions to expand or keep jobs in a given state.
“The big question mark is whether or not you’re incentivizing companies to do something they were going to do anyway,” he said. But what he’s found is that they have very little impact on changing company behavior. “In aggregate, we can say that they’re pretty ineffective and they’re very costly.”
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