The Phase Out Corporate Giveaways Interstate Compact is a proposed

interstate compact In the United States, an interstate compact is a pact or agreement between two or more states, or between states and any foreign sub-national government. Description Most early interstate compacts resolved boundary disputes, but since the earl ...

in the United States that would commit signatory states to ending the

economic development In economics, economic development (or economic and social development) is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and object ...

practice of providing targeted

subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...

tax abatement A tax holiday is a temporary reduction or elimination of a tax. It is synonymous with tax abatement, tax subsidy or tax reduction. Governments usually create tax holidays as incentives for business investment, although the arrangement has also ...

s and other forms of financial

incentive In general, incentives are anything that persuade a person or organization to alter their behavior to produce the desired outcome. The laws of economists and of behavior state that higher incentives amount to greater levels of effort and therefo ...

s to private companies. It is frequently formally referred to as the "Agreement for Best Practices in Economic Development" in legislation. As of November 2021, 15 states had bills before their legislatures that would bind them to the Compact's requirement not to offer subsidies to businesses located in other signatory states, and three other states had had such legislation introduced in previous sessions. Versions of the Compact have been proposed by

think tanks A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-gov ...

associated with

free-market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...

economic policies such as the

Mercatus Center The Mercatus Center is an American libertarian, free-market-oriented non-profit think tank. The Mercatus Center is located at the George Mason University campus, but it is privately funded and its employees are independent of the university. It ...

George Mason University George Mason University (GMU) is a Public university, public research university in Fairfax County, Virginia, United States. Located in Northern Virginia near Washington, D.C., the university is named in honor of George Mason, a Founding Father ...

and the

Mackinac Center for Public Policy The Mackinac Center for Public Policy () is a think tank headquartered in Midland, Michigan. Through research and programs, the Mackinac Center supports lower taxes, reduced regulatory authority for state agencies, right-to-work laws, school ...

. However, support for the Compact has been broadly bipartisan, with

left-wing Left-wing politics describes the range of Ideology#Political ideologies, political ideologies that support and seek to achieve social equality and egalitarianism, often in opposition to social hierarchy either as a whole or of certain social ...

think tanks such as the American Economic Liberties Project also supporting the Compact and both Republican and Democratic legislators sponsoring bills to join the Compact in their states. Legislators' statements and media reports generally suggest that interest in an interstate compact to end economic development "

corporate welfare Corporate welfare refers to government financial assistance, Subsidy, subsidies, tax breaks, or other favorable policies provided to private businesses or specific industries, ostensibly to promote economic growth, job creation, or other public b ...

" was accelerated by the controversy surrounding the

Amazon HQ2 Amazon HQ2 is Amazon (company), Amazon's corporate headquarters in National Landing in Crystal City, Virginia (part of Arlington, Virginia, Arlington County) in the Washington, D.C. area, and an expansion of the company's headquarters in Seattl ...

bid process, by the subsidies given to Foxconn in Wisconsin and by a growing body of academic research questioning the effectiveness of such programs at creating jobs.

References

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External links

Coalition to Phase Out Corporate Tax Giveaways
United States interstate compacts