State Budgets
Budget shortfalls, city defaults & bankruptcies, potential state bankruptcies means the budgets of individual states will impact the economies of the other states and the federal budget/deficit.

Amazon, New York and the End of Corporate Welfare

from The Wall Street Journal,

Special tax breaks do little to spur the economy. Now they’re becoming politically unpopular too.

Are New Yorkers better off after Amazon’s decision Thursday to cancel its planned headquarters in the Queens neighborhood of Long Island City? It’s a complicated question, weighing the benefits of new high-earning residents against the added strain on local services. Yet the pullout could lead to a decisive triumph for taxpayers across the nation, as city and state officials start to reckon with the popular backlash against corporate tax incentives.

Anticorporatism is driving the current wave of resistance to tax incentives, which means fiscally responsible leaders face both an opportunity and a challenge. Rather than stoke fears about the harms of big business, they’ll have to channel anger about corporate welfare toward lowering tax rates for firms large and small. States with lower, flatter taxes have managed to draw national businesses in recent years while still providing fertile conditions for local firms to grow. And though it may be hard for a politician to believe, a voter at the polls is likelier to remember the job he landed at a thriving medium-size firm than watching his mayor cut a ribbon at the paid-for facility of a corporate newcomer.

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