Why Tax Incentives Matter
States spend billions of dollars a year on tax credits, deductions and exemptions meant to encourage businesses to create or retain jobs and make investments. When designed and managed well, tax incentives can strengthen a state’s economy. But Pew’s research reveals that lawmakers often approve or continue incentives without knowing their potential cost or whether they are working. State leaders need better information to avoid unexpected budget challenges, identify effective incentives, and reform or end programs that are not meeting expectations.
How We Conduct Our Work
We study the policies and practices states have used to generate much-needed answers about the budget risks and economic returns of tax incentives. Based on this research, we work with leaders in selected states to advance policies that:
Protect budgets from unexpected tax incentive costs;
Evaluate all tax incentives on a regular schedule; and
Inform lawmakers’ policy choices with evidence from evaluations
Our WorkView All
Beginning in December, new financial reporting standards will require state and local governments to disclose the annual cost of tax incentives they approve to attract and retain businesses and create jobs. Read More
At the National Governors Association’s Summer Meeting this week in West Virginia, leaders from around the country will collaborate across party lines to develop best practices that improve state government. Important lessons can be learned from governors who enacted policies this year to strengthen their states’ long-term fiscal and economic health. These initiatives reflect a... Read More
Business Incentives Initiative
Pew’s business incentives initiative helps states identify and share best practices for collecting, managing, and analyzing data on economic development incentives.