How Place-Based Tax Incentives Can Reduce Geographic Inequality

68 Pages Posted: 2 Mar 2020 Last revised: 11 Aug 2022

See all articles by Michelle D. Layser

Michelle D. Layser

University of San Diego School of Law

Date Written: February 2, 2020

Abstract

Place-based tax incentives are frequently used by governments to encourage investment in low-income areas. But no standard exists to describe the ideal place-based tax incentive, making evaluation of these programs nearly impossible. This Article provides the necessary baseline by explaining when, where, and how to design place-based tax incentives that can benefit low-income communities by reducing geographic inequality. Using Geospatial Information System (GIS) mapping methods, this Article demonstrates how lawmakers can use public data to map spatial disadvantage. It then draws on tax theory to show how to design place-based tax incentives to reduce geographic inequality in targeted areas. The result is not a one-size-fits-all prescription, but a place-specific approach that can help place-based tax incentives become an effective vehicle for reducing underlying, geographic causes of neighborhood disadvantage. Comparing current place-based tax incentives to this baseline reveals that a significant weakness of current approaches is their failure to target places with geographic inequality or promote activities that could reduce it.

Keywords: tax, geography, inequality, poverty, tax incentives, Opportunity Zones

Suggested Citation

Layser, Michelle D., How Place-Based Tax Incentives Can Reduce Geographic Inequality (February 2, 2020). Tax Law Review, Vol. 74, No. 1, 2020, Available at SSRN: https://ssrn.com/abstract=3516469 or http://dx.doi.org/10.2139/ssrn.3516469

Michelle D. Layser (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

HOME PAGE: http://https://www.sandiego.edu/law/faculty/biography.php?profile_id=12852

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