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Some cities in the United States (US) still have many areas that need development. While this is the case, large developments are hard to implement due to the high costs associated, such as the associated high taxes. This is why cities like Austin should offer incentives in tax waivers to attract projects that result in such developments. While the government loses millions in these waivers, the long-term benefits are economically worthy and can help improve residents’ living standards and the overall local economy.
Companies that take the opportunity to work on incentivized projects should offer a living wage to workers. They are relieved millions of dollars by the government, and the least they can do is pay a little more to improve their workers’ living standards. The $11 living fee is also insignificant compared to the millions saved through the waivers. Cities handling these types of projects are supported by the state governments, for example, through the Texas enterprise fund (TEF) in Austin (TEDC, 2019). However, TEF only considers worthy projects promising to benefit the state, with a significant rate of return on the dollar for economic development (Patrick, 2021). As a result, a small developer working on small projects should not receive the same incentives as large developers, even when employees are paid the $11 living fee.
Living wages boost the local economy as more money is put in residents’ pockets. Residents’ purchasing power is increased with enough money, and more taxes are collected from local businesses. While costly initially, the long-term benefits of giving a living fee are high standards of living and increased productivity resulting from satisfied workers. Exceptions to the living fee should be made in cases where employees are already paid well, over $11. In such cases, unless the employers are willing to increase the wages, employees should be compensated at the company’s standard rates.
Conclusively, not all projects or programs should abide by the $11 living fee, even when projects are incentivized. Some companies like the US McFarlane’s do not have much work as they sell toys, and their work does not contribute significantly to the local economy. Overall, incentive effectively attracts large city developments, but the government should be careful about the type of projects funded. This will ensure maximum benefit from any tax waivers and achieve the expectations in cities like Austin and the state of Texas.
References
Patrick, C. (2021). Non-tax economic development incentives: In tools for state and local fiscal management. Edward Elgar Publishing.
Texas Economic Development Corporation (TEDC). (2019). Texas business incentives and programs overview.
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