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Tax Policy And Local Economic Development
lower the property taxes for selected groups or companies to assure that other industries in the area catch up.
In conclusion, I would like to note that taxation is an indispensable part of any country and its economic system. Taxation in the USA is paid to the governments of several levels. State taxation is limited primarily to sales and property tax and these are the two primary tools that states have in their disposal to influence business and social activities within that particular state. Lowering taxes typically brings in more people and businesses in the state and some states as noted earlier in the paper chose to abolish sales or property tax. State economic incentives can be achieved by altering the local tax rate for companies and individuals living in the state. Whenever a state wants to promote a certain industry it is likely to place a reduced tax burden on the companies operating in that industry. For instance, as noted earlier, one could allow the companies to use accelerated depreciation methods, provide property tax cuts/rebates for companies operating in poor counties, and waive a property fee payable in case of property replacement. Whenever a state wants to attract more people in the state the same property taxes should be lowered for individuals willing to buy land and houses. Reduction of sales and property taxes could also be an attractive incentive for people to move to another state.
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