A big problem is that it is that the benefits are rarely measured. It's assumed that it'll be worth it and never revisted. (http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban...)

I think a lot of it comes down to governments settling for crappy agreements. You do hear about businesses getting big tax breaks, then shutting down two years later. Smart agreements would allow the gov't to get some sort of restitution. Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations?

I just find the idea that private businesses are "taking advantage" of governments with these agreements. Really? A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?

> Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations?

See race to the bottom. Companies simply shop around for a set of tax breaks that doesn't come with strings attached.

> A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?

You mean people with money are influencing elected officials who need their money to win elections.

I like the escrow idea. I've also seen forgivable loans based on certain obligations (hiring, salary levels, etc.)

But they are taking advantage of a bunch of things; local governments inability to govern certain areas (whether due to state or federal laws) or that the mayor is thinking about election time and who would say jobs are bad?

Well, it becomes a bidding war, which means only one of the bidders has to be an idiot for a bad deal to happen.

The way they sold the Caterpillar plant down the road was by saying it might come out neutral with the tax incentives, but it would need a lot of other businesses nearby to support it.

I don't know if that worked out, but Barrow County (location of the plant) has a lot more businesses today than it did in 2013 when it opened. That could just be that it also filled out a big retail development (Barrow Crossing) and started on another (https://www.facebook.com/Gateway-at-University-Parkway-14074...)

Further reading: http://www.athensbusiness.org/announcement-profile.php?ID=56