Honors Theses and Capstones

Date of Award

Spring 2020

Project Type

Senior Honors Thesis

College or School

PAUL

Department

ACFI

Program or Major

Business Administration

Degree Name

Bachelor of Science

First Advisor

Peter Zaimes

Abstract

One of perhaps the most pressing political debates since the 2016 Presidential election has been centered around the impacts of the many tax breaks and incentives given to large corporations. These breaks, used most often to draw a company to a certain geographic area, are typically granted with good intention. For example, a local or state government will pursue a company by enticing them to relocate to their area in order to help boost their economy because people, jobs, and money will come with them. This can also lead to spin-off development, meaning even more people could flock to the area, thus improving the economy further. However, these incentives can severely backfire and damage these economies. Often, these corporations are in no need of an incentive because they are already very profitable – they would surely be capable of paying their taxes. These taxes would certainly benefit the area in which they operate, but it is in their best interest to avoid them to maximize their bottom line. Although they can bring jobs along with them, it is also possible that they draw more people to an area than it can sustain, and there is no guarantee that new jobs will be created, or at least not as many as promised… sometimes, companies are incentivized to move only a few minutes from their current location, sometimes they relocate their own staff to their new location, and sometimes they are unable to deliver on their lofty employment goals. When companies receive millions, or even billions of dollars to relocate, they can help improve and strengthen the economy of the city or state they move to, but it can also be incredibly detrimental when promises are not met or corporate income taxes are not paid.

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