Question A:
Giving tax incentives to specific firms to locate operations in a city or state typically generates local benefits that outweigh the costs to the city and/or state providing the incentives.
Responses
© 2025. Kent A. Clark Center for Global Markets.
19%
0%
2%
10%
45%
24%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
5%
14%
52%
29%
0%
Question B:
The US as a whole benefits when cities or states compete with each other by giving tax incentives to firms to locate operations in their jurisdictions.
Responses
© 2025. Kent A. Clark Center for Global Markets.
19%
0%
10%
43%
24%
5%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
16%
56%
26%
3%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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If it was not to the benefit of the local government, why would they do it?
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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The competition is fierce and the benefits uncertain. Winners curse is likely.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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If it's done carefully--the firms can't get the tax benefits and then leave--this can pay off for a city or state.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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It is difficult to believe that taxation decisions are consistent with cost-benefit analysis.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Of cours deals differ but usually the taxpayers get fleeced for a limited number of jobs that get relocated
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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It has local benefits, but the costs can outweigh them (e.g., if far enough beyond the peak of the Laffer Curve).
-see background information here |
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Benefits are wildly exaggerated in the popular press, and we lack definitive scientific evidence either way.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Well documented that subsidies to sport stadiums yield negative returns and no reason to believe that it is better for other industries
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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I doubt it but don't recall seeing anything rigorous on this.
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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See Greenstone, Hornbeck, and Moretti (JPE 2010) for some evidence of large positive spillovers
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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I don't see how anyone can have an opinion about this without data. A $1 tax break is worth it. $100B not. In between?
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 Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Such competition helps for local political economy reasons but may shift too much otherwise-public resources towards footloose companies.
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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I would agree if I were certain that governors had their states' long term interests in mind when cutting tax deals. Not sure that's true.
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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On its face, this sort of competition is useful. I can imagine that experts on this issue may suggest some unintended related distortions.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
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Oliver Hart |
Harvard | Bio/Vote History | ||
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There is no social benefit to the US as a whole unless the firms would have located abroad. There is a social loss from lower tax receipts.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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This is almost entirely zero sum, with the companies gaining and the taxpayers losing.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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It could help if tax rates tend to be too high for political economy reasons.
-see background information here |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Generally a waste of revenues in negative-sum game.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Such competitive does enhance allocative efficiency, but its primary effect is to transfer surplus from other taxpayers to firms.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Would agree if cities compete with uniform lower taxes for all firms.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Unless the firm would otherwise locate abroad, the only net effect is less tax revenue. The EU bans state aid for this reason.
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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There is a clear zero-sum aspect to tax competition. But nothing else can restrain the leviathan. The balance is unclear.
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Again data would be nice. Competition is good but unraveling is bad. Which is this? Transparency would help.
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Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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