by James Huffman
July 08, 2013
Where taxes and regulation are the same for all similarly situated businesses, competition among states and cities can lead to net increases in jobs and tax revenues. Lower tax and regulatory costs for private competitors can make previously uneconomic enterprises viable. But inter-jurisdictional competition in the granting of special favors serves only the interests of the favored recipients, and it does so at the expense of our long cherished value of equal protection of the laws. Even if the net result in a particular state or locality is more jobs and more tax revenue, it almost certainly means fewer jobs and less tax revenue in another state or city.