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
Each year, states collectively spend billions of dollars on economic development incentives. Are they worth the price? The answer isn't always obvious. By asking key questions, states can evaluate incentive programs and provide the evidence policymakers demand. Read More
The Pew Charitable Trusts commended Oklahoma Governor Mary Fallin today for signing HB 2182, which creates a robust evaluation process for the state’s economic development incentives. 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.